Unformatted text preview: just q_s = P. To find the market supply cure, add up the supply of the firms: Q_s = 9*q_s = 9*P. To find market price and quantity, set quantity supplied equal to quantity demanded: Q_s = 9*P = 30 – P = Q_d. This yields P* = 3, so Q* = 27. Firm profits = P*q_s – (1/2)*q_s^2 = 3*3 – (1/2)*3^2 = 9/2. b. Now firm sets MC=MR. Rearranging the demand function, P = 30 – Q. Therefore MR = 302Q. Now the firm is a monopolist, so its quantity supplied is also the market quantity supplied. To find the firms supply, MC = Q_s = 302Q_s = MR, so Q_s = 10. Therefore P = 20 (using the demand curve), and profits = 20*10 – (1/2)*10^2....
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 Spring '08
 TANG
 Microeconomics, Monopoly, Supply And Demand, San Diego Surfboards, Surfboards exclusive rights

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