Suppose a representative firm in a perfectly competitive, constant cost industry has a long run cost function
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Suppose a representative firm in a perfectly competitive, constant cost industry has a long run cost function TC=4q2+100q+100.
The market demand function is Q=1000-p.
a. Draw two diagrams, one for the market and one for a representative firm.
b. What is the long-run equilibrium price for this industry?
c.Determine the long run equilibrium quantity per firm and market quantity.
d.Determine the long run number of firms.
e. If market price is p=120, what will be the output of each firm? Why?
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