this is the question

1. This question will help you think through price ceilings both in a competitive and a non-competitive market. Consider a market where the market demand curve is Q = 100 - 0.1P. (a) Perfect Competition i. Suppose that the market for this product were perfectly competitive with 10 identical firms. The marginal cost of each firm, to produce the product is MC(q) = 25q where q is the individual quantity that each firm produces. Given that each firm is identical, what is the market supply curve in this market? (Hint: Be careful to add up correctly! Adding quantities produced makes sense. Adding prices does not makes sense. Double hint: first think about what each firm would produce at any given price.) ii. What is the equilibrium market price and quantity? What are consumer and producer surplus (overall)? iii. Suppose that the government regulates that the price of this good cannot go above $300. What is the effect of this price ceiling on the market quantity? What is now the consumer surplus? What is now the producer surplus? (b) Monopoly i. Suppose that all 10 firms in this market merged to create a single, monopolist producer. Suppose there are no changes to any product costs, so the new monopolist's marginal cost curve is identical to the market supply curve that you got in part (a)- Given that this monopolist can set any price it wants, what price will it set? What will the market quantity be? What are consumer and produce surplus? What is the "deadweight loss from monopoly power"? (Le., by how much is total surplus different in the monopoly case vs. the perfectly competitive case?) ii. Suppose that the government regulates that the price of this good cannot go above $300. What is the new market quantity sold with this price ceiling in effect? What is now the consumer surplus? What is now the producer surplus? iii. The effect of this price ceiling on total surplus should look very different from the case of a price ceiling in a perfectly competitive market (either from part (a) or from our discussion in class). Briefly give some intuition as to why it is different here