Use the following market demand and supply equations to answer questions a and b: 1.Qd=200-4P and...

Use the following market demand and supply equations to answer questions a and b:

1.Qd=200-4P and Qs=P+100

2.TC=0.05*(Q-100)^2

a.)Assume this market is a competitive market calculate the market's profit maximizing price, quantity, and profit. What will happen to profit in the long-run?

b.)Assume this market is a monopolistically competitive market calculate the market's profit maximizing price, quantity, and profit. What will happen to profit in the long-run?

Expert Solution

In the long run,there is 0 profits in a perfectly competitive industry.This is because of the condition of free entry and exit.

2.in the long run as well,a monopoly can maintain supernormalsupernormal profit.

Rahul Sunny answered 1 year ago

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