Perfect Competition Part a 1. Perfect competition vs. monopoly: (a) What is the dierence between the demand curve faced by a perfectly competitive rm and a perfectly competitive industry and a monopolist rm? (b) What is the dierence between the total revenue curve faced by a perfeme competitive rm and a monopolist rm? How about the marginal revenue curve? 2. Perfect competition vs. monopolistic competition: (a) What is the difference between perfect competition and monopolistic competition? (In) Suppose the only long-run adjustment is free entry or exit of rms. What is the difference between the short-run equilibrium conditions faced by a perfectly competitive rm and a monopolistically competitive rm? How about the long-run equilibrium conditions? 3. Perfect Competition shortrun and long-run: Consider a competitive industry in which the market demand for the product is expressed as: P = 282 0.002519, and the industry supply of the product is expressed as: P = 2 + 0.001.563. The typical rm in this market has a. marginal cost of M C = 2 + 1.8?5q, where q is an individual rm's output and Q is the industry or total market output. (a) Determine the equilibrium market price and output. Calculate the consumer surplus and the producer surplus at equilibrium in the industry. (b) Determine the output of a. typical rm in this industry, given your answer to part (a) above. Hornr many rms are there in the industry? (:3) If the industry demand were to increase to P = 352 0.00256), what would the new price and output in the industry he in the short-run? What would the new output for a typical rm be? {Do not round up your answer.) Part b (d) If the original supply and demand (given before part a for this question) represented a long-run equilibrium condition in the market (assuming constant cost industry}, would the new equilibrium in part {c} represent a new long-run equilibrium for the typical rm? Explain. (e) Suppose the only long-run adjustment is free entry or exit of rms. To be in the long-run equilibrium with the new increased demand, how many rms would enter into or leave from the industry? 4. What is the Lerner's index of market power? How do we measure it