Q. Consider a social planner's problem also conclude the socially optimal number of firms no. 3

(1) Suppose that every consumer receives fixed utility s ¯ from consuming a product. Let s ¯ = 5. Suppose that there are n firms in the marketplace also every firm charges p. In this case, Illustrate what is total consumer surplus in terms of n, t also p?

(2) If there are n firms in the marketplace also every firm charges p, Illustrate what is total producer surplus?

(3) If there are n firms in the marketplace, illustrate what is the social surplus?

(4) Find no that maximizes the social surplus. Compare no also n∗ from 6.1. Does the marketplace equilibrium have too little entry or too much entry?