3.6 Suppose that the market demand for expensive steak dinners is given by Q = 1,000 - 10P, so that the marginal revenue is MR = 100 - 0.2Q, where Q is the number of steak dinners per day and P is the price of a dinner. The marginal cost and average total cost are both constant and equal to $40 per dinner.

a. If there is only one firm in the market, what quantity will the firm produce, what price will the firm set, and what is the firm’s economic profit?

b. If a second firm that produces identical steaks and has identical costs enters the market and acts according to the Cournot oligopoly model, what are the equilibrium price, the equilibrium quantity, and each firm’s economic profit?

c. If the second firm instead acts according to the Bertrand oligopoly model, what are the equilibrium price, the equilibrium quantity, and each firm’s economic profit?