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Jack and Annie are the only sellers of otters in a three-state area. The inverse market demand for otters is given by P 100 0.50, where -the total quantity offered for sale in the marketplace. Specifically, 0- where q, is the amount of otters offered for sale by Jack and q, is the amount offered for sale by Annie. Both Jack and Annie can produce otters at a constant marginal and average total cost of S20. 1. Graph the market demand curve. What would be the prevailing price and quantity if this industry were controlled by a monopolist? (1 mark) a) b) Suppose that Jack solves part (a) and announces that he will bring half of the monopoly quantity to market each day. How much will Jack and Annie produce and sell? ( mark) . c) Is the outcome you found in part (d an equilibrium outcome? How do you know? (1 mark) d) Suppose that Jack observes Annies output from part (b). Find Jacks residual demand and marginal revenue curves, and determine if Jack should adjust his output in response to Annies choice of q What will the new price of otters be? (1 mark)

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