The market for wheat consists of 500 identical firms, each with the following total cost function: T C = 90, 000 + 0.00001q² where q is measured in bushels per year.

The market demand for wheat is: Q_d = 90,000,000 20,000,000p

(a) Determine the short-run equilibrium price and quantity.

(b) Calculate the profit maximizing quantity for the individual firm. Calculate the firm's short run profit(loss) at that quantity, and the firm's producer surplus.

(c) Assume that the short-run profit or loss is representative of the current long-run prospects in this market, and the industry is a constant cost industry. You may further assume that there are no barriers to entry or exit in the market. Describe the expected long-run response to the conditions described in part(b),including the expected equilibrium price and the number of firms that will eventually make up the market.