A local business in a small college town has a major portion of their business to college bookstore. On the side they also provide services to other local businesses. The local demand is Q=200-5P. The average and marginal cost is $8.
a. Calculate output, price, and profit under the monopoly consditions they enjoy
b. To test other markets, they contemplate opening a retail outlets in several college towns where there will be other competitors. CAlculate price and output under this condition if it is perfectly competitive.