The inverse demand for a product is 100-Q. It can be produced at a constant marginal cost of 20 per unit. Let's start with the assumption that there are no fixed costs. Suppose there are three identical firms competing. 1.) How much willeachfirm produce? 2.) What will be the market price? 3.) How much consumer surplus is there now? 4.) How much producer surplus is there now? 5.) How much deadweight loss is there (as compared to perfect competition)? 6.) Under the Cournot model, how many firms would there need to be in order for there to be no deadweight loss?

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