Jack and Annie are the only sellers of otters in a three-state area. The inverse market demand for otters is given by P = 100-0.5Q, where Q = the total quantity offered for sale in the marketplace. Specifically, Q = 4 + 4A, where q, is the amount of otters offered for sale by Jack and qa is the amount offered for sale by Annie. Both Jack and Annie can produce otters at a constant marginal and average total cost of $20. a. Graph the market demand curve. What would be the prevailing price and quantity if this industry were controlled by a monopolist? b. Suppose that Jack solves

part (a) and announces that he will bring half of the monopoly quantity to market each day. What would be the profit-maximizing quantity for Annie to produce? c. Given your answers to (b), what will the industry quantity and final price of otters be? How much profit will Annie earn? Jack? d. Suppose that Jack observes Annie's output from part (b). Find Jack's residual demand and marginal revenue curves, and determine if Jack should adjust his output in response to Annie's choice of A. What will the new price of otters be? e. Is the outcome you found in part (d) an equilibrium outcome? How do you know?