2. Consider a perfectly competitive market in the short run.

Assume that market demand is P= 1000 - Q. Denoting firm level quantity by q,

assume TC=30q-10q^2+q^3 so that MC=30-20q+3q^2.

a) If there are 10 identical firm in the industry in the short run, what is the market equilibrium price and quantity?

b) Do firms make a profit or loss in the short run, and how much are these profits/losses?

c) What is the equilibrium price in the long run?

d) What will be equilibrium profit in the long run?

e) How many firms will there be in the long run?

2. (31') marks) Consider a perfectly.F competitive market in the short run. Assume that market demand is P=l - Q. Denoting rm level quantity by q, assume TC=3 nq-iaq1+q3 so that MC=3-2Dq+3q2. a) If there are 10 identical rm in the industry in the short run, what is the market equilibrium price and quantity? b} Do rms make a prot or loss in the short run, and hotsr much are these protsflosses'.' c) What is the equilibrium price in the long run? (1) What will be equilibrium prot in the long run? e) HOW man}:r rms will there be in the long mm