Suppose there are 1000 identical wheat farmers. For each, the total costs are given by: C = 10 + q2. The market demand for wheat is: Q = 600,000 - 100p.

2.1 Derive the short-run equilibrium and find the value of Q, q, and p in equilibrium. Draw in a graph the market equilibrium, and in another graph next to it the firm's MC and AC and the equilibrium point.

2.2 Does the typical firm earn a profit? Calculate the profit or loss in the short run for the firm. What will happen in this market in the long run, specifically will form enter/exit or just remain the same in it?