Saturday 2 February 2013

What is the output in perfect competition?

I'm having difficulty with this economic question.

An industry has constant average costs of production of £50 per unit of output. The industry demand is given by the relationship P = 230 - 3Qd

What would be the output of the industry under perfect competition?

Suppose the industry is taken over by a monopolist. What price would the monopolist charge to maximise its profits?

What is the level of the monopolists profit?

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