The industry demand function for bulk plastic is represented by the following equation:
P= 800 - 20Q
Where Q represents millions of pounds of plastic
The total cost function for the industry, exclusive of a required return on invested capital is
TC = 300 + 500Q + 10Q2
Where Q represents millions of pounds of plastic
a. If this industry acts like a monopolist in the determination of price and out-put compute the profit-maximizing level of price and output
b. Assume that this industry is composed of many (500) small firms, such that the demand function facing any individual firm is
P = $620
Compute the profit-maximizing level of price and output under these conditions (the industry's total cost function remains unchanged)