Suppose that the demand for good x is given by : P=100-8q Marginal cost of production is given by : P=10+2q MR is given by 100-16q  What will the equilibrium quantity and price be in a competivite market?  Calculate consumer, producer and total surplus.  If we contrast this market to one in which good x is produced by a monopoly, what will be the quantity produced and the price each unit will be sold as?  Calculate consumer, producer and total surplus.  What will be the loss in total surplus due to a monopolist?

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Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.