Please help me do question 2 and 3 and explain it please type it down or write i

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Please help me do question 2 and 3 and explain it

please type it down or write it clearly, thanks.

2. Suppose the demand for a commodity is given as Q-300-20P, the marginal cost of producing this commodity for this industry is MC=5+0.05Q (1) If it is a perfectly competitive industry, what will be the price charged and output produced?(6%) (2) If it is a monopolist, what will be the price charged and output produced? (696) (3) Calculate the deadweight loss from monopolization. (6%) 3. Samsung and Sony have to decide whether they will increase the spending on Research and Development (R&D;) Department in order to improve the features of their products which are sold worldwide. If they both increase the spending, the gains of doing so are zero for both. If only one of them increases the R&D; budget while the other doesn't, the gain of the improved features is equal to the loss of the other company. If both of them do not change R&D; spending, their customers will switch to other brand from the U.S., both will equally make huge losses. (1) Construct the pay-off matrix for the game. (6%) (2) Is there a dominant strategy equilibrium? If so, what is it? (6%) (7o-3a). R-lo P:40 p 15- 80-3-o-1

Explanation / Answer

2)

1. Q = 300 - 20P

P = 15 - 0.05Q

Perfectly competitive equilibrium occurs where

P = MC

15 - 0.05Q = 5 + 0.05Q

0.1Q = 10

Q = 10 / 0.1 = 100

P = 15 - 0.05(100) = $10

2. TR = P * Q = 15Q - 0.05Q2

MR = 15 - 0.1Q

The monopoly equilibrium condition is

MR = MC

15 - 0.1Q = 5 + 0.05Q

0.15Q = 10

Q = 10 / 0.15 = 66.67

P = 15 - 0.05(66.67) = $11.67

MC = 5 + 0.05(66.67) = $8.33

3. DWL = 0.5[(11.67 - 8.33) * (100 - 66.67)

= $55.66

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