1 Consider a competitive firm with these cost functions:

AC = (q-2)2 + 5 MC = 3q2 - 8q + 9

a In the LR, what q will the firm produce? What P will the firm charge?

b In the LR, what will the firm make? Evaluate their efficiency & CS.

If the firm becomes a monopoly with the above cost function and faces

D: P = 100 - Q MR = 100 - 2Q

c What happens to Q? What happens to P?

d What happens to ? What happens to their efficiency? Market CS?