A perfectly competitive industry has 70 identical firms in the short run, each of which has the short-run cost curves listed in the following table.

Output Average total cost Average variable cost Marginal

11 20.5 13.1 12

12 19.8 13 14

13 19.3 13.1 16

14 19.1 13.3 18

15 19 13.6 20

16 19.1 14 22

17 19.2 14.5 24

18 19.5 15 26

19 19.8 15.6 28

20 20.3 16.2 30

21 20.7 16.9

The industry demand is given in the next table

Price Quantity demanded

11 3200

13 3000

15 2800

17 2600

19 2400

21 2200

23 2000

25 1800

27 1600

29 1400

31 1200

a)What is the shutdown point? What is the break-even point?

b)What amount of profit (or loss) is being made by each firm at the short-run equilibrium? Is this industry in long-run equilibrium at its present size?

What is the optimal number of firms in the long-run?