Consider an industry with two possible long-run cost functions. There are no quasi-fixed costs in this industry: C1 = (y^2)/2 MC1 = Y C2 = 5y MCz = 5+ Demand is given by: P = 25 - x/2 ~ a. What is the producer surplus for firms of both types? Is this the same as profit? ~ b. Suppose the market interest rate was 5%, what would a type 1 firm sell for? What are economic profits? c. Suppose now that the government decided to grant a monopoly over this market. What is the monopolist's marginal revenue function? Note: dP/dx = -1/2. ~ d. What would the equilibrium price and quantity be for a monopoly of each type? ~