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Unformatted text preview: different cost functions and market demand functions. With perfect competition try different numbers of firms. In equilibrium, increasing the number of firms by 1 leads to the firms making losses. Contrast this outcome with the monopoly outcome. An Example of Market Structure (cont.) The Monopoly Equilibrium Marginal Cost for the Monopolist is: MC = 10 + 2Q/50 Marginal Revenue for the Monopolist is MR = 120 - 0.36*Q The Profit-Maximizing Quantity is: Q= 275.00 The Market Clearing Price is: P= $70.50 Average Cost for the Monopolist is: AC = $33.68 Profit to the Monopolist is: = $10,125.00 This takes the same demand and cost functions as for the perfectly competitive case and derives the monopoly equilibrium assuming that the monopolist has the same number of plants as there are perfectly competitive firms...
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