A perfectly competitive constant cost industry is populated with many firms, and potential entrants, who all have the (long-run) cost function

() = ^3 20^2+ 100 + 8,000.

a) What is the minimum LR average cost of a firm? If the market price is equal to

this minimum average cost, what output will each firm supply?

b) Suppose the market demand curve is given by d = 2500 3, and the

industry is in long-run equilibrium: is equal to minimum LR average cost.

i) What is the total quantity demanded?

ii) If each firm is supplying the output from (a), how many firms must be there in the market?