Question 3 [multi-plant monopoly vs. dominant rm]: Suppose you are running a rm with a marginal cost function given by: P = X + 0.50. Price-taking consumers have a demand function given by: P = 4000 20. For each X from 1500 to 3500: a. Suppose the rm above is a dominant rm, facing a price-taking fringe supply function given by: P = Q + 3000. Compute the implied dominant rm monopoly equilibrium. Using the equilibrium price and quantity calculate point estimates of the elasticity of supply (us) and demand (on). 2 Graph the Lerner Index under dominant rm (on x-axis) against the ratio of elasticities (times minus one), 2: (on y-axis). Explain the curve. 0. Suppose instead the rm above is a multi-plant monopolist, with a supply inction for a second plant given by: P = Q + 3000 ( the some as in 0!). Compute the implied multi-plant monopoly equilibrium. Using the equilibrium price and quantity calculate point estimates of the elasticity of supply (as ) and demand {1}\"). To the graph from a, add a graph of Lerner index under multi-plant monopoly ( on x-axis) against the ratio of elasticities (times minus one), 2: (on y-axis). Explain the curve. 0. Compare the two curves and explain how they relate to the resulting elasticities. 0. Which model best explains OPEC's behavior in crude oil markets? Given this, for which range of X do yoa think best explains OPEC's behavior in crude oil markets? Careilly explain your reasoning