The AC and MC values for firms in a perfectly competitive industry are asfollows:

Q AC MC

1 4 12

2 8 20

3 12 28

4 16 36

5 20 44

6 24 52

7 28 60

8 32 68

9 36 76

Suppose that there are 70 firms operating in the industry. Using the MCcurve, find out how much output in total is delivered to the market at each price(you only need to consider prices equal to the MC valuesabove). Now assume that the market demand curve is given by p= 305- .5Q, where p is the market price. For purposes of thisproblem, it is helpful to"invert" the demandcurve, writing Q in terms of p. This gives Q= 610- 2p.

a) Verify that when p= 44 the market has

A. excess supply

B. excess demand equal to [ ? ] units.

When p= 68, the market has

A. excess supply

B. excess demand equal to [ ? ] units.

b) Find the market equilibriumprice, and compute output per firm and profit per firm at this price(you need only check prices corresponding to the above MCvalues). The equilibrium price is p=[ ? ] , output per firm is Q= [ ? ], and profit per firm equals [ ? ]. Find the answers for [ ? ].

(don't include$ signs in any of youranswers).