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Assume that the paper industry is perfectly competitive and has 220 producers. One hundred and twenty of these producers are high-cost producers, each with a
Assume that the paper industry is perfectly competitive and has 220 producers. One hundred and twenty of these producers are "high-cost" producers, each with a short-run supply curve given by Qhc = 3.75P. One hundred of these producers are "low-cost" producers, with a short-run supply curve given by Qlc = 5.50P. Quantities are measured in reams, and prices are dollars per ream. If the market demand curve for reams of paper is given by QD = 9,600 - 200P, what is the industry producer surplus
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