Competitive Equilibrium

Competitive equilibrium Market demand is Q" = max {6 - p, 10 - 3p} where p is price and Q is quantity demanded. There are two identical competitive firms in the market. For i = 1, 2, firm i's total cost of production is TC (qi) = 97. Find each firm's supply as a function of p. Hint: do not worry about market de- mand at this point. Find the competitive equilibrium, {p*, qi, q2}. Hint: sketch market demand before doing anything else. In other words, Qd = 6 - p if 6 -p > 10 - 3p and Qd = 10 - 3p if 6 - p