A market is perfectly competitive

1. A market is perfectly competitive. The demand in the market is Q = 300 -5P. The supply function of the firms in the market is QS = 20P - 200 (for P > $10). (a) List the main assumptions underlying the model of perfect competition. (b) Find the competitive equilibrium quantity (Q*) and price (P*). (c) Determine Consumer Surplus (CS), Producer Surplus (PS) and Total Surplus (TS) associated with the equilibrium in (b). (d) Write out the Willingness-to-Pay (WTP) of the consumer as a function of the quantity (the inverse demand). What is the WTP on the last unit produced and consumed in the market? (e) Write out the industry marginal cost as a function of the level of quantity produced. To find the industry marginal costs recall that for competitive firms MR = p and firms maximize profits by equating MR = MC). What is the marginal cost of the last unit produced in the competitive equilibrium? (f) Is Total Surplus maximized in the competitive equilibrium? 2. In a market wh