Inverse demand curve P=a-bQ, and assume firm has production cost of cQ. Prove that if firm is a monolpoly, output that maximises profit is (a-c)/2b. Prove that if firm is perfectly competitive, output is (a-c)/b.
I can solve the monopoly part by differentiating the profit function and setting it equal to zero. I do not know what to do with the perfectly competitive firm. Thank you.
Also, please no stupid answers like 'Whats Q?' or 'This isnt economics!'
I can solve the monopoly part by differentiating the profit function and setting it equal to zero. I do not know what to do with the perfectly competitive firm. Thank you.
Also, please no stupid answers like 'Whats Q?' or 'This isnt economics!'