Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions:

=250000.2 =5000+0.3

If all firm in this market have identical cost structures:

1. a)How many firms operate in this market at this point?(3 points).
2. b)What is the profit maximizing quantity produced by each competitive firm?(3 points).

Now, assume that the inverse demand for this product increases to = 35000 0.2, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents:

c) How many new firms entered this market?(3 points).

1. d)What is the value of the elasticity of supply at long-run market equilibrium?(3 points).
2. e)Draw a fully-labeled graph that demonstrated the above changes at the firm and market
3. levels, highlighting the long-run industry supply curve.(3 points).