Question: The cost function for a single plant is: C(q) = 5q The market demand curve is P = 1005 Q 1.Find the long-run competitive

The cost function for a single plant is:

C(q) = 5q

The market demand curve is

P = 1005 – Q

1.Find the long-run competitive equilibrium price(1 pt) and output. Illustrate graphically. What is consumers’ surplus in competitive equilibrium?

2.Find the price and output if the industry is monopolized. Illustrate graphically. How much profit does the monopolist make? What is the welfare loss under monopoly?

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