Gray Company is a producer of supercomputers. Suppose a potential entrant into the market for supercomputers has asked you to evaluate the short and longrun potential of this market. The following market demand and cost information has been developed: P = 54 1.5Q TR = 54Q 1.5Q2 MR = 54 3Q TC = 200 + 6Q + 0.5Q2 MC = 6 + Q where P is price, Q is units measured by the number of supercomputers, TR is total revenues, MR is marginal revenue, TC is total costs including a normal rate of return, MC is marginal cost. a) Assume that these demand and cost data are descriptive of Gray's historical experience. Calculate output, price, and economic profits earned by Gray Computer as a monopolist. What is the point price elasticity of demand at this output level? b) Calculatetherangewithinwhichalongrunequilibriumpricex'output combination would be found for individual firms if entry eliminated Gray's economic profits. (Note: Assume that the cost function is unchanged and that the high priceowoutput solution results from a parallel shift in the demand curve while the low pricex'highoutput solution results from a competitive equilibrium.) Assume that a twofirm duopoly dominates the market for computer, and that the firms face a linear market demand curve: P = 1250 Q where P is price and Q is total output in the market. Thus Q = QA + QB. For simplicity, also assume that both firms produce an identical product, have no fixed costs and marginal cost MCA = MCB = 50. Cournot Equilibrium a) Calculate the total revenue and marginal revenue functions for Firm A and Firm B. b) Derive the output reaction curves for Firms A and B. c) Calculate the Courtnot market equilibrium priceoutput solutions