Economic Monopolistic Competition

Finish an Economic Monopolistic Competition & Indices of Market Concentration & Power Assignment by handwriting with steps and details
Instructions:For full marks, please:1) Label axis on graphs including units, use graph paper at end or plot to scale on regular paper using a ruler to ensurescale is correct , title your graph and label all curves clearly. You may do on attached graph paper using an ipad orwritable screen.2) For algebraic questions, include units and use short sentences to guide readers through your logic. Pay particularattention to equilibrium statements and or optimality conditions. Use terms like “rearrange”, “substitute” and include aconcluding statement.3) For written answers, be sure that sentences and paragraphs are logically constructed and are in your own words.Examples can help with explanations.4) Hand in individual assignments with the logic written in your own words.5) Put the questions in order and clearly number them. Your assignment should be neat and tidy.6) Submit to Assessments >> Assignments. Collate all pages into ONE PDF file for submission. Please do NOT handin question sheet, this increases assignment length making it more difficult to grade online.

Econ3319 (2020) Assn 3: Monopolistic Competition & Indices of Market
Concentration & Power
Ruth Forsdyke
Due: Monday Nov. 16th, 2020 11:59 ADT.
Note: This assignment looks harder than it is! You do not literally have to solve the monopolistic competition model;
I have done that for you. It is guided discovery and provides you an opportunity to practice optimization problems
while hopefully helping you to understand how the model works. My best advice is to watch the videos and then dive
in and try the assignment consulting the slides or textbook as needed.
* you will not necessarily find an integer number of firms. Just leave as is.
Question 1 : Monopolistic Competition
Consider a city with many banks with a monopolistically competitive market structure with horizontal
product differentiation as in class.1 Suppose that each bank sells loan units (q) at price p where quantity units
are in loan units/ year and price units are in $/loan. Each firm’s demand curve is:

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