a) Compute the equilibrium price that any producer will charge, as a function of the number of

firms in the industry and the size of the market.

b) Write down the average costs faced by any firm, as a function of the number of firms in the

industry and the size of the market.

c) Compute the number of firms (in the long run), the price charged for each product, and the

quantity produced by each firm in the industry in the free trade equilibrium. Show it in a graph.

d) Assume now that entry in the market is not free: each firm has to pay a license fee of 336 to its

own government, to be renewed every year, in order to participate in the market. Compute the

number of firms (in the long run) in the free trade equilibrium under this new situation.

e) What happens to the consumers' welfare? Explain.