5. The Acme Widget Company holds a patent on an important process in the production of widgets, giving them a monopoly position in this market. The firm currently operates two plants that were built at different points in time and have different cost structures: Plant 1: TC1 = 25+ 2q12 Plant 2: TC2 = 16+222 Market demand for widgets is given by: Demand: Q = 40-P. a. If the Acme Widget Company is trying to maximize profit, how many widgets will it produce and sell in the market? How will total production be divided between the two plants? What is the market price? How much profit does the firm earn? b. In the long run the firm can operate any number of plants of either type. What is the firm's optimal output of widgets in the long run? How many plants of each type will it operate? How many widgets will the firm produce in a representative plant of each type? What is the market price? How much profit does the firm earn in this case? c. Now, assume that the patent runs out and individual plants are operated as separate firms and firms can enter or exit the market. Calculate the equilibrium quantity of widgets. How many firms of each type will operate? How many widgets will a representative firm of each type produce? What is the market price? How much do the firms in the industry earn as profit? Who gains and who loses by the change from part (b) to part (c)? By how much? 5. The Acme Widget Company holds a patent on an important process in the production of widgets, giving them a monopoly position in this market. The firm currently operates two plants that were built at different points in time and have different cost structures: Plant 1: TC1 = 25+ 2q12 Plant 2: TC2 = 16+222 Market demand for widgets is given by: Demand: Q = 40-P. a. If the Acme Widget Company is trying to maximize profit, how many widgets will it produce and sell in the market? How will total production be divided between the two plants? What is the market price? How much profit does the firm earn? b. In the long run the firm can operate any number of plants of either type. What is the firm's optimal output of widgets in the long run? How many plants of each type will it operate? How many widgets will the firm produce in a representative plant of each type? What is the market price? How much profit does the firm earn in this case? c. Now, assume that the patent runs out and individual plants are operated as separate firms and firms can enter or exit the market. Calculate the equilibrium quantity of widgets. How many firms of each type will operate? How many widgets will a representative firm of each type produce? What is the market price? How much do the firms in the industry earn as profit? Who gains and who loses by the change from part (b) to part (c)? By how much