The firm B&B sells Breads. A market demand for bread is given by: Qd = 300-200P and the market supply for breadis given by: Qs = 200P-100.

This firm hasFC= -10, VC = 10Q, MC=Q, where P : price of one bread (), Q : quantity of breads.

Let assume that Firm B&B operates in a perfect competitivemarket.

A.In the market equilibrium, how many bread would be sold and at what price? (10 points max)

B.How much should Firm B&B produce to have a maximum profit? How much is it? (5 points max)

C.How many firms, having the same cost structure and producing the same breads, can have a positive profit in this market? (5 points max)

D.What would happen if B&B convinced the other firms to set the price of one bread at 1.2 ? Explain the market adjustment process. (5points max)