A6.3 Walter is an antitrust consultant. He currently works in a large European city with many other antitrust consultants. Walter is considering moving to Tampa, Florida, where there are currently several other antitrust consulting firms. If Walter makes this move, he will be competing in a monopolistically competitive market. Walter knows that the demand for his antitrust consulting services in Tampa is Qd = 2,200 - 5P where Qd is the number of hours of antitrust consulting services demanded and P is the hourly price of antitrust consulting services. Walter’s total cost of setting up an antitrust consulting firm in Tampa and producing consulting services is TC1Q2 = 20,000 + 160Q where Q is the number of hours of antitrust consulting services that Walter supplies.

a. If Walter were to open an antitrust consulting firm in Tampa, what would be his marginal revenue from an additional hour of antitrust consulting services?

b. If Walter were to open an antitrust consulting firm in Tampa, what would be his marginal cost of an additional hour of antitrust consulting services?

c. What is Walter’s profit-maximizing number of antitrust consulting hours if he opens an antitrust consulting firm in Tampa?

d. What is Walter’s profit-maximizing price for an hour of consulting services?