Consider a monopoly market in which the market demand curve is given by P = 240 - 2Q, the marginal revenue curve is MR = 240 - 4Q, the marginal cost curve is MC = 2Q, and there are zero fixed costs. Suppose the government intervenes and turns the market into a competitive market, and all the firms in the market have the same marginal cost curve as the monopolist, MC = 20, and zero fixed costs. How much is the resulting gain in total surplus? 400 800 300 600 оооо

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Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.