(d) The market is organized perfectly competitively (point =P, HINT: p = MC(Q) where Q is the total level of output by the two firms and MC is the joint (multiplant) marginal cost in (c), i.e., the horizontal sum of the two firms’ marginal costs)(e) Utilizing the table , Compare/rank the CS across the 4 scenarios (that is; which one has the highest CS, which has the second highest... ).NO NEED TO CALCULATE or EXPLAIN ! PROBLEM Two firms (1 and 2) with total costs TC:(q) = 60q and TC:(q)=120q (hence the marginal costs areconstant at 60 and 120 respectively) are facing a market demand Q= 1200 - 2p.Analyzing each of the 4 scenarios below, fill in the table below;Market organizationQ= q1+q2 (total output)q1q2P (market price)C = CournotS = Stackelberg%DM = CollusionP = Perfect competition%3D

The Nash equilibrium for perfect competition is when the competitors charge maximum or more than when P=MC but in this case, all outcomes are ruled out and the firm charges the lowest price.For horizontal sum: MC = 60 + 120 = 180 P = 600 - 0.5Q TR =P*Q TR = 600 Q - 0.5Q2 AR = TR/Q = 600 - 0.5Q Here, AR = MC 600 - 0.5Q = 180 0.5Q = 420 Q = 840 units P = 600 - 0.5*840 P = 600 - 420 P = $180 The quantities sold by both the firms are equal q1 = q2 = 420 unitsConsumer surplus is the price consumer is willing to pay minus the price that is actually paid. CS is maximum in case of perfect competition as there is no supernormal profits. CS is 2nd highest in case of Stackelberg model as the leader firm is the only one deciding, CS is 3rd highest in the case of the Cournot model as the profits are maximized for both the firms. CS is the least high in the case of the monopoly model as the profits are maximized for both the firms together.