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In a market the inverse demand function is given by P = 180 – 0,5Q

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In a market the inverse demand function is given by P = 180 – 0,5Q. Unit production cost is TL 40 and does not vary with the amount of goods produced. Assume that there are no other costs associated with production of this good.

a) Find the market equilibrium (equilibrium Q and P) if this market is perfectly competitive. Also compute the social welfare. (show all steps of your calculations) (10 p)

b) Find the market equilibrium (equilibrium Q and P) if this market is monopolistic. Also compute the social welfare. (show all steps of your calculations) (10 p)

c) Calculate the deadweight loss due to monopoly. Discuss what measures could be taken to eliminate the deadweight loss due to monopoly. (10 p)

2.) Briefly discuss equilibrium in perfectly competitive markets. Explain why the supply curve in perfectly competitive markets is parallel to the quantity axis in long run while it can be positively sloped only in the short run. (use graphs to support your explanations) (10 p)