Suppose the marginal costs (and therefore the market supply) for Mimi Chocolates is given by
MC: P = 0.5 Qs+ 3. The market demand is given by
D: P = 5 - 0.5Qd.
a.What is the equilibrium price and quantity if the market for chocolates is perfectly competitive?
b.If Mimi Chocolates has a monopoly in the markets what will be the price in the market and the quantity produced? Now that P is no longer equal to MR; derive MR to answer this.
c.Is that true that a monopolist produces less quantity than a competitive firm, and charge higher price?