Please help me find the following solutions: a. If Ann and al produce the same q

Question

Please help me find the following solutions:

a. If Ann and al produce the same quantity of rides as would be produced in perfect competition, what are the quantities or rides?

The price of a ride?  

and the economic profit of Ann and Zack?

B. If Ann and Zack form a cartel and prod uce the same the same quantity of rides as would be produced in a monopoly, what are the quantities of rides?  

The price of a ride?

And the economic profit of Ann and Zack?

Isolated Island has two taxi companies, one owned by Ann and the other owned by Zack. Figure 2 shows the demand curve for taxi rides, D, and the average total cost of the firms, ATC.

Explanation / Answer

Under perfect competition the industry would prduce where the demand curve intesects the average cost curve so 25 rides at $7 would be produced. Since ATC=P there would be no economic profit.

Under a monopoly they would produce where ATC= Marginal revenue which would be a curve twice as steep as the demand curve

So a quantity of 20 would be produced at a price of 10.. ATC would be 5 so economic profit would be 20(10-5)= 100.

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