The following market demand and firm cost conditions describe a perfectly competitive industry:

p = 1000 - 0.001Q

TC(q) = 20q - 0.2q2 + 0.001q3

(a) Find the firms short-run supply function. (1)

(b) Explain the firm's shutdown rule. (2)

(c) Suppose we are on the short-run and the number of firms is 500. Determine the equilibrium price (p), market output (Q), and firm output (q).

Briefly explain whether there will be entry or exit in the long

run. (2)

(d) Determine the long-run equilibrium price (p), market output

(Q), firm output (q) and the number of (identical) firms. (2)