9.23. The global cobalt mining industry is perfectly competitive. Each existing firm and every potential entrant faces an identical U-shaped average cost curve. The minimum level of average cost is $5 per ton and occurs when a firm produces 2 million tons of cobalt per year.

The market demand curve for cobalt is D(P) ! 205 " P, where D(P) is the demand for cobalt in millions of tons per year when the market price is P dollars per ton. What is the long-run equilibrium price for cobalt? How much cobalt does each producer make at this equilibrium price? How many active cobalt producers will be in the market?

s(P ) ! e 0, if P 6 10 3P " 30, if P # 10 QDemand Market ! 228 " 10P.

QDemand Market ! 108 " 10P.

Q P # 0. Supply B ! 2P, QSupply A ! e

" 10 $ P, when P 7 10 0, when P % 10