1. Youarethesoleproducerof anovelpolymerthathasthepotentialtotransformanumberofother industries: synthetic clothing, medical devices, and sports equipment, for example. You have a patent on the chemical structure for this polymer for 9 more years. From the entirety of industries that will use your product, you face a demand curve given by = 425 -10Q. (Units are in thousands of tons produced per year.) Your marginal cost curve is given by= 5 + 15.
   1. Identify the quantityatwhichyou'llwantto produce,,tomaximize profit. (Rounddownto the nearest thousand tons of production and maintain this rounding for all subsequent questions.) (1 point)
   2. Identifythepricethatyoucouldsettomaximizeprofit(1point).
   3. Throughvariousdiscussionsyou'vebeenabletoconstructthisdemandcurvebylearningother firms' [maximum] willingness to pay for your product. Someone on your team suggested charging different prices to different firms.
      1. Ifyoucoulddo this,howmuchwouldyoubenefit?(3points)
      2. Ifyoucoulddothis,wouldtherebeanoverallsocialbenefit(increaseinwelfare)?Why or why not? (2 points)
      3. Doyouthinkyou'dbeabletochargedifferentpricestodifferentfirms?Whyorwhy

not?(2 points)

1. Yourpatentexpiresandseveralotherfirmsenterthemarketforproductionofthepolymeryou created. You estimate that the demand curve you will now face from residual demand is =

320-10Q.

1. Nowthatyouareoperatinginanoligopolisticmarket,doyouplantosetthequantityyou produce or price of your polymer? Why? (2 points)
2. What isthenewyou'd produce?(1point)
3. What willbe thenewinthemarket? (2points)

1. Your long-run average cost curve is given by= 5+108/Q+15Q. What was your profitthisyear,rightaftermorefirmsenteredthemarket?Whatwasyourprofitlastyear, before your patent expired? (2 points)