Question #1

Suppose that the (inverse) demand curve for Cranberries is given by P = 140 5Q and TC = Q2

a. What are four conditions required for a competitive market? 4 Points

b. What is equilibrium Price and Quantity and Profit if the market is competitive? 7 Points

c. What is equilibrium Price and Quantity and Profit if there are monopoly in the market (note Q = Q)? 7 Points

d. If there were 3 firms, where do you estimate the output and the price would bethis does not require a mathematical calculationit is based on the expectations created by the prior two answers (1-b, 1-c, and 1-d). 2 Points