25. If a firm with market power is producing where MR = MC and it wants to increase its output to the point that would be analogous to perfect competition, it will: a. Drop its price to the point where P = AVC = MR b. Produce at the point where MC intersects with the demand curve c. Raise its price to the point where P = MC d. Drop its price until n = 1 e. None of the above 26. The market for laundering services is perfectly competitive and can be represented by the following supply and demand curves: Demand for laundry by consumers: QD = 3200 - 200P Supply of laundry by firms: Qs = - 800 + 600P where Q = millions of laundered shirts in the MARKET overall, and P = the price of laundering a piece of clothing. Each firm in this market has the same total cost TC = 5500 + q'/1000; AC = 5500/q + q/1000; and MC = q/500. Notation wise q = is the number of laundered items by each firm (Q is measured in millions of items, q in items). Calculate the equilibrium price and quantity of that would exist under a free market. a) P=5, Q 2200 million b) P=10, Q=1200 c) P=15, Q=700 d) P=6, Q=2000 e) P=8, Q=1600 27. Suppose that the market demand for mountain spring water is given as P = 1200 - Q, where Q is in thousands of bottles and P is in dollars per thousand bottles. Assume mountain spring water can be produced at no cost. What is the profit maximizing level of output and price of a monopolist? What is the monopolist's profit (same as revenue since cost = 0)?a) P=600, Q=600, Profit=Revenue=$360,000. b) P=6, Q=1600, Profit=Revenue=$360,000. c) P=60, Q=600, Profit=Revenue=$380,000. d) P=10, Q=600, Profit=Revenue=$370,000. e) P=1, Q=1199, Profit=Revenue=$1,199.28. Consider the following game, where Kevin and John play simultaneously and both must decide between dancing or staying still: John Ham Dance Not Dance Kevin Bacon Dance $150, $150 $10, $200 Not Dance $200, $10 $50, $50 How many equilibria does this game have? Which are they? a) A unique Nash equilibrium exists in which Kevin and John don't dance. b) A unique Nash equilibrium exists in which Kevin and John both dance. c) A unique Nash equilibrium exists in which Kevin dances and John doesn't dance. d) A unique Nash equilibrium exists in which Kevin doesn't dance and John dances. e) No Nash equilibrium exists. 29. Consider the following game, where Kevin and John play simultaneously and both must decide between dancing or staying still: John Ham Dance Not Dance Kevin Bacon Dance $150, $150 $10, $200 Not Dance $200, $10 $50, $50 Suppose Kevin moves first, and John decides after observing Kevin's decision. How many equilibria does this game have? Which are they?a) A unique Nash equilibrium exists in which Kevin and John don't dance. b) A unique Nash equilibrium exists in which Kevin and John both dance. c) A unique Nash equilibrium exists in which Kevin dances and John doesn't dance. d) A unique Nash equilibrium exists in which Kevin doesn't dance and John dances. e) No Nash equilibrium exists