An industry of price-taking profit-maximising firms in perfect competition all produce using the same technology, and each has a total cost function given by:

TC = 2q 4q + 3q

Where TC is measured in thousands of pounds per week, and q is measured in thousands of units per week. Then: a) If the market price of output is p = 4.5 what is each firm's output and profit (or loss)? [10 marks]

b) If the market price of output is p = 11 what is each firm's output and profit (or loss)? [8 marks]

c) Show that each firm's long-run output is 1000 unit per week (i.e. 1 thousands of units per week). [8 marks]

d) What is the price of output when the industry is in equilibrium? [6 marks]

e) if the market demand is given by P = 11 0.01Q, where Q is the industry output in thousands of units per week, what is the industry's equilibrium output and how many firms are in the industry in equilibrium? [10 marks]

f) If the market demand shifts to P = 12 .01Q, what is the industry's equilibrium output and how many firms are in the industry in the new equilibrium? [8 marks]