Question: Craig’s Red Sea Restaurant is the only restaurant in Columbia, South Carolina, that sells Ethiopian food. The demand for Ethiopian food is given by Q = 10,000 - 20P. Craig’s costs are given by TC = 1,000 + 10Q + .05Q2.

(a) If Craig behaves like a monopolist, what are the output level and price to maximize its profit?

(b) If Craig behaves like a purely competitive firm, what are the output level and price to maximize its profit?