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A. Perfectly Competitive Market Consider a market where 100 firms are in operation in the short run. Each firm's cost function is T C =
A. Perfectly Competitive Market
Consider a market where 100 firms are in operation in the short run. Each firm's cost function is T C = 450 + 2q 2 . The market demand function is QD = 1200 5P.
1. Calculate short-run market equilibrium.
2. Will there be entry or exit in the long run?
3. Calculate the long-run competitive equilibriumthe equilibrium price, total market demand, and how many firms in operation in the long run equilibrium ( 225 = 15).
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