Perfect Competition. On a natural resource perfect competition market, we have 100 firms that face the following short-run total cost function (see the constant term representing the fixed costs): TC = 2y+50. where the variable y measures the quantity produced. The demand function of the market is given instead by the following: y = 2,600 - p

a. Find each firm's short-run supply curve and plot the relevant revenue/cost curves for the PC firm operating in this market.

b. After summing horizontally all the supply curves, find the market clearing equilib rium price p*.

c. Using the Excel Solver, find then the optimal quantity at which each firm produces with this equilibrium price and measure the extra profit area (or economic profit).

d. Plot the chart of demand versus supply and equilibrium lines.