Given the following: P = 20,000 - 15.6Q and TC= 400,000 + 4640Q + 10Q2
where P is the product price, Q is the output level, and Q2 is Q squared
Problem 1: Given we have a monopoly due to a patent, determine the profit maximizing output level, the monopoly price, and economic profits (High price/high output model).
Problem 2: Assuming we have lost our patent but that the cost curves are the same AND we are in the long run, now find the price, output for the firm and output for the industry and firm profits for
A) a monopolistic competition model, and
B) perfect competition model