Final answer:
To determine the value to a monopolist and a firm in a perfectly competitive industry, we need to calculate their respective profits. For the monopolist, we substitute the cost of production into the demand curve to find the price, quantity, and profit. For the firm in a perfectly competitive market, we calculate the profit at each output level using total cost and total revenue, and find the maximum benefit for an inventor by comparing the difference in profit between the original and reduced cost.
Step-by-step explanation:
In order to determine the value to a monopolist who is able to develop a patented process for producing Scruffs at a cost of $45, we need to calculate the monopolist's profit. The monopolist will charge what the market is willing to pay, which is determined by the demand curve. Let's assume that the monopolist can produce the same quantity of Scruffs as the industry, which is Q = 75,000 - 500P. Substituting the cost of production ($45) into the demand curve, we can solve for the price, and then calculate the quantity and profit.
For the purely competitive industry, the maximum benefit that an inventor of a process that reduces the cost of producing Scruffs by $5 per unit can expect to receive by licensing her invention to the firms in the industry is determined by the difference in profit. We can calculate the profit for a firm in a perfectly competitive market using the given information on total cost and total revenue for each output level. By subtracting the total cost from the total revenue, we can find the profit at each level of output, and determine the maximum benefit for the inventor by finding the difference in profit between the original and the reduced cost.