D. (1) There are 20 firms in the market for wodgets. Each firm faces a demand curve: q = 150 - 5P. Each firm has the cost function C(q) = 6:} + 120. a. What quantity does each firm supply? What price does each firm charge? b. What are profits for each firm? Are costs minimized? C. Is this a long-run market equilibrium? If not, describe (qualitatively) what will happen in the market. d. Is monopolistic competition less efficient than perfect competition? Explain carefully. (2) There are 12 MacDonalds located at equal distances around an island of 1 mile in circumference. People are located with uniform density around the island. No one can live in or travel through the interior (it has active volcanos). Every night all 200,000 people on the island go out to eat a Big Mac. It costs $5 per person per mile to travel on the island. It costs $5,000 in fixed costs to operate a MacDonalds each night and costs $2 per person to serve a Big Mac. a. What is the optimal number of MacDonalds for the island? How many people would have to live on the island for the optimal number of MacDonalds to be 20? b. Why might the actual number of MacDonalds be greater than the optimal number? Should this type of market be regulated with respect to entry? Why or why not? (3) Is it possible to have a market with too much variety? It you said yes, give an original example from real life of such a market and explain why you think the amount of variety is excessive. If you said no, explain why. (4) Is it possible to have a market with too little variety? If you said yes, give an original example from real life of such a market and explain why additional variety does not arise in that market. If you said no, explain why