MICROECONOMICS

Question 1 [27 Marks] Suppose that Jumbo and Rim are the oligopolistic rms in bottled spring water production in Nomansland. The market demand is given by Get = 5000 20P,where Qd is the number of kilolitres demanded per month while P is the price of kilolitres of bottled water. The marginal cost of a kilolitre of bottled water is R10. a) Find the Coumot equilibrium quantities and price. (5 marks) b) Find the Coumot prots and the monopolist profits. (5 marks) c) Find the price and quantityr when the firm behaves as perfectly competitive. (2 marks) d) Quantify the welfare effects of the above market structures. (5 marks) e) Assume the bottled spring water production oligopoly consists of 20 firms, with the same marginal costs of R10 and the same market demand given above. Find the Coumot quantities, prices, and prots at equilibrium. (5 marks) f} Suppose that ten rms in (e) merged. Find the new Coumot equilibrium quantities, price, and profits