Production of a certain good is discrete and has a cost structure characterized as follows:
| q |
100 |
150 |
200 |
300 |
400 |
500 |
| C(q)/q |
300 |
250 |
220 |
200 |
190 |
188 |
Assume inverse demand is p(Q) = 300 - 0.2Q
a. Find the optimal monopoly output
b. Assume an incumbent monoploy operates according to (a). Is it profitable for a second firm to enter?