Question 11 10 points Save Answer In a perfectly competitive market, the cost structure of the typical firm is C = 25+Q2-20, and industry demand is Q = 600 - 20P. Currently, 24 firms serve the market. 1. Create a spreadsheet (similar to the given example) to model the short-run and long-run dynamics of this market. A B D E F G 1 Equilibrium in a Perfectly Competitive Market 2. 3 The Industry Price #Firms Qs Qd Qd-Qs Profit 4 10 24 192 400 208.00 168.00 5 Typical Firm Of MC Cost AC P-MC Profit 6 8 14 73 9.13 -4.00 7.00 7 8 Short Run Qd-Qs=0, P=MC; adjust P & Qf 9 Long Run Qd-Qs=0, P=MC, P=AC; adjust P, Qf & # Firms 2. What equilibrium price will prevail in the short run where the number of firms is fixed at 24? Adjust P and Qf. (Hint: Specify cell F4, the difference between Qd and Qs, as the objective cell. Set it equal to zero. In addition, include the constraint that P - MC in cell F6 must equal zero, i.e. MR = MC for max profit of each firm.) 3. Copy cells A3:G9 to a new location and answer the following question: What equilibrium price will prevail in the long run? (Hint: Include the number of firms into the list of Changing Variable Cells list in Solver window. Also add the constraint that Price = AC.) 4. Upload your excel file. Question 11 10 points Save Answer In a perfectly competitive market, the cost structure of the typical firm is C = 25+Q2-20, and industry demand is Q = 600 - 20P. Currently, 24 firms serve the market. 1. Create a spreadsheet (similar to the given example) to model the short-run and long-run dynamics of this market. A B D E F G 1 Equilibrium in a Perfectly Competitive Market 2. 3 The Industry Price #Firms Qs Qd Qd-Qs Profit 4 10 24 192 400 208.00 168.00 5 Typical Firm Of MC Cost AC P-MC Profit 6 8 14 73 9.13 -4.00 7.00 7 8 Short Run Qd-Qs=0, P=MC; adjust P & Qf 9 Long Run Qd-Qs=0, P=MC, P=AC; adjust P, Qf & # Firms 2. What equilibrium price will prevail in the short run where the number of firms is fixed at 24? Adjust P and Qf. (Hint: Specify cell F4, the difference between Qd and Qs, as the objective cell. Set it equal to zero. In addition, include the constraint that P - MC in cell F6 must equal zero, i.e. MR = MC for max profit of each firm.) 3. Copy cells A3:G9 to a new location and answer the following question: What equilibrium price will prevail in the long run? (Hint: Include the number of firms into the list of Changing Variable Cells list in Solver window. Also add the constraint that Price = AC.) 4. Upload your excel file