Assume that in a perfectly competitive environment there are five firms competing with each other's. The cost curves of each firm are given by the following equations:

= = , , , ,

5

and1/_i =30 = /

i=1

By assuming P = 100 - 0.20Q is the industry demand function find the equilibrium Price, Quantity and Profit of each firm.

(b)Using question 1 above and assume that:

= = , , ... . ,

5

and1/_i =30 = /

i=1

Drive the long-run equilibrium of the firm and industry. How many firms will be present in the industry in the long-run?