A monopolist can produce at a constant average (and marginal) cost of It faces a market demand curve of AC=MC=5. Q=83-P. Calculate the profit-maximizing price and quantity for this monopolist. Also calculate its profits. The monopoly would produce 39 units of output at a price of $99. (Enter numeric responses using real numbers rounded to two decimal places.) In turn, the monopoly would earn profit of $1521 Suppose a second firm enters the market. Let Q₁ be the output of the first firm and Q2 be the output of the second. Market demand is now given by Q1 + Q₂ = 83-P. Assuming that this second firm has the same costs as the first, write the profits of each firm as a function of Q1 and Q2. The profit functions for Firm 1 (II) and for Firm 2 (12) are A. II₁ = [83-(Q1 + Q2)]Q1-5Q1 and II2 = [83 (Q1 + Q2)]Q2-5Q2. B. II₁ = PXQ₁-5Q1 and I2 =PxQ2-5Q2. c. I₁ =[83-Q₁]Q1-5Q1 and I2 = [83-Q21Q2-5Q2. OD. II₁ =[83-(Q1 + Q2)]-5Q1 and I2 =[83-(Q1 + Q2)]-5Q2. Suppose (as in the Cournot model) that each firm chooses its profit-maximizing level of output on the assumption that its competitor's output is fixed. Find each firm's "reaction curve" (i.e., the rule that gives its desired output in terms of its competitor's output). The reaction curves for Firm 1 and Firm 2 are OA. Q₁ = 39.00-0.5Q2 and Q2 -39.00 -0.5Q₁. OB. Q₁ =39.00 Q2 and Q2 39.00-Q1. OC. Q₁ = 39.00-2Q2 and Q2 39.00-201. OD. Q₁ =78.00 0.502 and Q2 78.00 -0.5Q1- E. Q₁ =78.00-Q2 and Q2-78.00-Q₁. Calculate the Cournot equilibrium (i.e., the values of Q1 and Q2 for which each firm is doing as well as it can given its competitor's output.). What are the resulting market price and profits of each firm? When competing, each firm will produce 26 units of output. The market price will be $31. In turn, each firm will earn profit of $676. Suppose there are N firms in the industry, all with the same constant marginal cost, MC 5. Find the Cournot equilibrium. How much will each firm produce, what will be the market price, and how much profit will each firm earn? Each firm will produce output (Q) such that Each firm will produce output (Q) such that ○ A. 39.00 Q= (N+1) OB. 78.00 Q = (N+1) ○ C. N78.00 Q: (N+1) OD. 78.00 Q N ○ E. 78.00 Q= (N-1) The market price will be A. 78.00 P 83- (N+1) O B. N78.00 P 83- (N+1) C. N78.00 P= (N+1) OD. N78.00 D. N78.00 P=83- (N-1) ○ E. N39.00 P 83- (N-1) Firm n will earn profit of O A. II= 6,084.00 (N+1)2 00 о O B. N По= (N+1) C. N II₁ = (N+1) O D. 1 II= (N+1) ○ E. 6,084.00 II= (N+1) Also, show that as N becomes large, the market price approaches the price that would prevail under perfect competition. As N becomes large, the market price approaches $