1.Suppose you are given the following information about a perfectly competitive industry:

Q_d= 900-50PThere are 50 firms in the marketEach firm has TC= 25 + 0.25qandMC= 0.5q

a.Find the supply curve for an individual firm (q as a function of P)

b.Find the market supply curve (Q as a function of P)

c.Find the market equilibrium price and quantity in the market (P and Q).

d.Find each firm's short-run levels of output and profit.

e.What price would we expect to see in this market in the long run?

f.How many firms can exist in this market in the long run?

Now suppose that one company buys up all the firms that exist in the long run solution you found in part f.

g. What price will this monopolist charge and how much output will it produce? (Note: when adding up the MC curves for all the firms, add horizontally, not vertically. For example, if the MC of 1 unit is 0.5 for 1 firm, then when there are 10 firms, the MC of 10 units is 0.5; if there are 20 firms, then the MC of the 20^thunit is 0.5, etc.) You may want to graph this situation to minimize the chance of making an important mistake.

h. How much deadweight loss (in dollars) will there be as a result of the monopolization of this market?