In the perfectly competitive market for beef cattle in Angleland, there are 250 farmers who all have the same costs and will supply beef according to this total cost function:

TC = 144 + 8q + q²,where q = farmer's output

Fixed costs are $120.The minimum point on the short run and long run average cost curves for these firms comes at q = 12 and LRAC = $32.You may assume that the beef cattle industry in Angleland is a constant cost industry.

Market demand for beef is, originally, given by the equation

P = 62 - 0.01Q, where Q = industry's output

where the price is measured in dollars per unit of beef and the quantity is units of beef traded.

a)What is the initial equilibrium price of beef cattle per unit, and the initial quantity produced by each farmer, and the initial quantity traded in the market as a whole?

Hint: You need to find the industry's supply curve before solving for the market equilibrium, and Q = sum of all farmer's output.

b)Based on your answer in part (a), is the market for beef cattle in its long-run equilibrium? Yes/No, explain.

All of a sudden, there is an outbreak of "Mad Cow Disease".Even though there is no perceptible effect on costs of this unfortunate illness, demand for beef falls to:

P = 44 - 0.01Q

c)What is the initial effect of this drop in demand on the short run equilibrium price of beef and on the quantity sold by each farmer and the quantity sold in the market as a whole?What amount of profit is earned by each farmer in the short run?

d)When this industry makes long run adjustments, what is the new long run equilibrium price of beef?How many farmers are there in the industry in the long run?