6.2 The long run average cost curve for a competitive firm is AC = 35 - 10q + q2.

a. Use the Excel Solver tool to find the cost-minimizing quantity. Enter the labels q and AC in cells A1 and B1. Enter the formula for AC in cell B2. Select the Data tab then select the Solver tool.23 A dialog box will appear. Enter B2 in the Set Objective row, select Min, and enter A2 in the “By Changing Variable Cells” row. Then select Solve. What is the cost-minimizing quantity?

What is AC at this quantity?

b. This firm is one of many identical firms in a competitive industry that is in long run equilibrium.

The market demand function for this industry is Q = 620 - 8p. Use Excel to determine the industry quantity. (Hint: The long-run supply curve is horizontal at the minimum of the average cost of a typical firm.)

c. How many firms are in this industry in the long-run competitive equilibrium?