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Consider a monopolistically competitive firm whose cost is given by C = 2 + 2Q + Q 2 , and its demand function is given

Consider a monopolistically competitive firm whose

cost is given by C = 2 + 2Q + Q 2 , and its demand function is given by

Q =32 - 4P.

(1) Find the optimal price and quantity of output in the short run.

(2) What long-run adjustments should you expect? Explain.

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