The market demand curve for a product is given below:
$$Q D = 50 - 0.5 P$$
(i)Assume that the market is supplied by a monopolist with a constant unit cost equal to $40. Calculate the equilibrium price and quantity.
(ii)Now assume that the market is supplied by perfectly competitive firms and that the market supply curve is perfectly elastic at a price equal to $40. Calculate the equilibrium price and quantity.

Question

The market demand curve for a product is given below:
 $$Q D = 50 - 0.5 P$$ 
(i)Assume that the market is supplied by a monopolist with a constant unit cost equal to $40. Calculate the equilibrium price and quantity.
(ii)Now assume that the market is supplied by perfectly competitive firms and that the market supply curve is perfectly elastic at a price equal to $40. Calculate the equilibrium price and quantity.

Quizplus · Accepted Answer

The Answer of The market demand curve for a product is given below:
 $$Q D = 50 - 0.5 P$$ 
(i)Assume that the market is supplied by a monopolist with a constant unit cost equal to $40. Calculate the equilibrium price and quantity.
(ii)Now assume that the market is supplied by perfectly competitive firms and that the market supply curve is perfectly elastic at a price equal to $40. Calculate the equilibrium price and quantity.

The Market Demand Curve for a Product Is Given Below QD=50−0.5PQ D = 50 - 0.5 PQD=50−0.5P

The Market Demand Curve for a Product Is Given Below $Q D = 50 - 0.5 P$