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An industry has n identical firms. The short-run cost function of a price taking firm is given by C(q)=4q2+100. The market demand curve is Q=600-10p.

An industry has n identical firms. The short-run cost function of a price taking firm is given by C(q)=4q2+100. The market demand curve is Q=600-10p.

a. Find the market equilibrium price and quantity. b. Will there be entry or exit from this industry in the long run? Under what conditions?

Can you explain part b mathematically? Can you give an argument about the entry or the exit?

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