A11 Points

Calculate the price and quantity an Airline would select if it were in a Perfectly Competitive Industry.

TC = 8 + 4Q(note that MC = 4).Demand is P=20- Q

iDraw the demand curve and the MC curve.(2 points)

iiHow much is Consumer Surplus?(3 Points)

iiiWhat is price and quantity for the Perfectly Competitive Industry?(4 points)

ivWhat is the profit for the Perfectly Competitive Industry?(2 points)

B9 Points

Calculate the price and quantity an Airline would select if it were a monopoly.

TC = 8+ 4Q.Demand is P=20- Q

iWhat is the fixed cost in this example (2 points)

iiDraw the demand curve, the marginal revenue curve and the MC curve.(1 points)

iiiHow much is Consumer Surplus?(1 Points)

ivWhat is price and quantity for the monopoly?(3 points)

vWhat is the profit for the monopoly?(2 points)