4. Suppose that a firm in a perfectly competitive industry faces the following short-run cost function: = 0.2 3 8 2 + 130.

a. What will be the long-run equilibrium price and per firm quantity?

b. The market demand is given by = 8350 5. How many total firms will there be at the long-run equilibrium?

c. If a negative demand shock causes the market demand to decrease to = 7240 8, how will the individual firms and the constant cost industry in general respond to the negative demand shock in the short run and the long run?

d. How would the industry response be different if it were a decreasing cost industry?