Question : 1. Assume that the market for bottled polar iceberg water : 1963
1. Assume that the market for bottled polar iceberg water is perfectly competitive, with market inverse demand given by P D (Q) = 50 - .005Q, price measured in dollars per bottle, and Q measured in hundreds of bottles. The short-run marginal cost curve for a typical bottled polar iceberg water producing firm is MC(q) = 4 + .02q, with MC in dollars per bottle and q in hundreds of bottles.
a. If there are 20 identical firms, determine the industry supply function.b. What is the market equilibrium quantity of bottled polar iceberg water, and what is the equilibrium price?c. At this output level, what is the typical firm's producer surplus?d. What is consumer surplus?