Crispies&Co operates in a perfectly competitive market for cereal. The market supply and demand curves are given as follows:

• Supply curve: P = 0.000003Q
• Demand curve: P = 15 - 0.00002Q

The short run MC curve for a cereal production is:

• MC = 0.1 + 0.0009Q

1. Find the equilibrium price for cereal (2.5 marks)

2. Find the profit maximizing short run equilibrium level of output for a cereal manufacturing facility. (2.5 marks)

3. At the level of output determined above, is the factory making a profit, breaking-even, or making a loss? Explain your answer. (2.5 marks)

4. If all factories in the market produce identical stock, how many factories are producing cereal? (2.5 marks)