Exercise 1: Monopoly Vs Competition Consider a market with inverse demand given by p(Q) = 40 - 9. Suppose the only potential supplier in the market is choosing whether to enter the market. If it enters, it will have costs given by C(Q) = Q2 + F, where F > 0. a) (10 points) For what values of F will the firm enter? b) (10 points) Suppose F = 5. What is the total surplus in the market? c) (10 points) Suppose a government regulation agency forces this firm to behave "as if" the market was perfectly competitive. What are the welfare gains associated with this policy? Why do markets may (or may not) benefit from a transition like this one