Suppose that there are 1,000 firms in a perfectly competitive industry, each with a short-run total cost curve given by TC = 800 + 8Q + 0.1Q2 and marginal cost curve given by MC = 8 + 0.2Q.

a. The short-run profit-maximizing output level for each firm at a market price of $20 is _______________. b. The short-run profit for each firm at a market price of $20 is $______________.

c. Given your answer to b. above, what is your recommendation for this firm assuming it remains in this industry?

d. What do you expect to happen to the size of this industry over time?

e. Graph your answers to a.-b in the space below: