SAC 40 ANSC AVC 40 2. (40 points) Suppose that Tulips are supplied by a competitive industry with 14 identical firms, and suppose that all of them have an identical short-run cost curve STC = 48+ 92 . The corresponding marginal cost curve is 20 . Assume that 39 of the firm's fixed cost is sunk. The market demand curve is Qa = 160 - P. a. Solve the individual firm's profit maximization problem to derive the firm's supply function. Compute the market supply curve and determine the equilibrium price and quantity of cats. How many firms operates in equilibrium? Bonus Point (5 points): What is the profit per firm? the b to be emor e lea b. Suppose the demand curve shifts in to Qa = 36 - P. Compute the market supply curve and es of determine the equilibrium price and quantity of cats. How many firms produce in equilibrium? STC = 48+Q2 MC = 2Q igur ially FC = 48 m. SFC = 39 Qd = 160- P : of wave NSFC = 9 ANSC = NSFC+ VC tud me Q NUSC 9 + Q2 a ) MC = ANSC = Q rate Q a 6 er di