In a perfectly competitive market, industry demand is: P = 850 - 2Q, and industry supply is: P = 250 + 4Q (Supply is the sum of the marginal cost curves of the firms in the industry).
(a) Determine price and output under perfect competition.
(b) Now suppose that all the firms collude to form a single monopoly cartel. Given that there is no change in the demand or cost conditions of the industry, what price and total output would the cartel set? Compare the monopoly outcome with the competitive outcome calculated earlier.

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The Answer of In a perfectly competitive market, industry demand is: P = 850 - 2Q, and industry supply is: P = 250 + 4Q (Supply is the sum of the marginal cost curves of the firms in the industry).
(a) Determine price and output under perfect competition.
(b) Now suppose that all the firms collude to form a single monopoly cartel. Given that there is no change in the demand or cost conditions of the industry, what price and total output would the cartel set? Compare the monopoly outcome with the competitive outcome calculated earlier.

In a Perfectly Competitive Market, Industry Demand Is: P =