1.6. Suppose that an industry is characterized as follows:

a. If there is only one firm in the industry, find the monopoly price, quantity, and level of profit.

b. Find the price, quantity, and level of profit if the industry is competitive.

c. Graphically illustrate the demand curve, marginal revenue curve, marginal cost curve, and average cost curve. Identify the difference between the profit level of the monopoly and the profit level of the competitive industry in two different ways. Verify that the two are numerically equivalent.

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C = 100+2q2 MC=4q P=90-2Q MR = 90-4Q each firm's total cost function firm's marginal cost function industry demand curve industry marginal revenue curve