Two of your classmates have an idea for a new food truck called Funk Seoul Brother, that sells Korean street food and sushi burritos. It would be the only supplier of this food in Athens.Market research suggests that the demand curve for the food will be P=40-(Q/80). It will cost $2000 to set up the food truck, which is necessary before any food can be made.In addition to the setup cost, there is a marginal cost of $6 per entrée for every entrée made.a. What is the profit-maximizing price and quantity?What profit will this food truck generate?b. If this market were instead perfectly competitive, what would be the equilibrium price and quantity?c. How much deadweight loss occurs under the monopolist? **Market Analysis of Funk Seoul Brother Food Truck**Two classmates have proposed a new food truck venture, Funk Seoul Brother, which will sell Korean street food and sushi burritos, exclusively supplying this niche in Athens. Market research indicates that the demand curve for their offerings is represented by $ P = 40 - (Q/80) $. The initial setup cost for the food truck totals $2000, alongside a variable marginal cost of $6 per entrée produced.### Economic Questions and Solutions#### a. Profit-Maximizing Price and Quantity- **Objective:** Determine the price and quantity that will maximize the food truck's profit, and calculate the profit generated.- **Considerations:** Use the demand curve and cost information to derive the profit-maximizing conditions.#### b. Equilibrium in a Perfectly Competitive Market- **Objective:** Identify the equilibrium price and quantity if the market were perfectly competitive.- **Considerations:** Assume price equals marginal cost in a perfectly competitive market to find these values.#### c. Deadweight Loss Under Monopoly- **Objective:** Quantify the deadweight loss associated with the monopolistic scenario of Funk Seoul Brother.- **Considerations:** Calculate the loss in total welfare due to the monopoly's pricing strategy compared to the socially optimal outcome.Upon addressing these questions, the exercise aims to highlight the economic implications and potential inefficiencies in different market structures involving this unique food truck concept.

Monopoly is a scenario in which there is just one company operating in a certain market. Thus, a single company owns and controls a 100% portion of the market. For new businesses to join the market, there is a barrier. Monopoly businesses set prices. Businesses are making economic profit in the near term. Due to the unrestricted entry of new businesses into the market, businesses are eventually making a regular profit. When there are several buyers and sellers in the market, there is perfect competition. All businesses sell similar products. The balance between supply and demand on the market determines price. Both businesses and people are price takers. Individual businesses or consumers cannot affect prices. Companies may readily enter the market and continue to exist. When there are several buyers and sellers in the market, there is perfect competition. All businesses sell similar products. The balance between supply and demand on the market determines price. Both businesses and people are price takers. Individual businesses or consumers cannot affect prices. Companies may readily enter the market and continue to exist.a. Profit maximizing output occurs at the point where the marginal cost is equal o marginal revenue. Thus, profit maximizing output can be calculated as follows. Profit maximizing output is 1,360 units. Profit maximizing price can be calculated by substituting the profit maximizing output in to the demand equation. Profit maximizing price is $23. Profit can be calculated a follows. Profit is $12,120.b. In perfect competition, firms produces output at the point where the price is equal to marginal cost. Equilibrium quantity in perfect competition can be calculated as follows. Perfect competition output is 2,720 units. Perfect competition price can be calculated by substituting the perfect competition output in to the demand equation. Perfect competition price is $6.c. Deadweight loss can be calculated as follows. Deadweight loss is $11,560.