Suppose all firms in a given industry have the same supply curve given by Si(p) = p/2. Plot and label the four industry supply curves generated by these firms if there are 1,2,3 or 4 firms operating in the industry.

1. If all of the firms had a cost structure such that if the price was below $3, they would be losing money, what would be the equilbrium prices and output in the industry if the market demand was equal to D(p) = 3.5?

Answer: price = _____, quantity = _____ How many firms would exist in such a market?

1. What if the identical conditions as above held except that the market demand was equal to D(p) = 8 - p? now what would be the equilibrium price and output _____ How many firms would operate in such a market? _________.