There are a number of food trucks at UCLA selling burritos. Each burrito is currently sold for $4.

The marginal cost per burrito to a particular truck is $2.5, and there is no fixed cost. Also, no

food truck can sell more than 200 burritos per day.

a) How many burritos would each food truck want to sell? What would be the profits per

truck?

b) If the market is perfectly competitive (there is free entry), what will happen to the

price of each burrito in the long run? What about profits?

c) The market demand for burritos (at UCLA) is Q = 3,200 - 880P

If 200 burritos are sold each day by each truck, how many food trucks will be there in

existence in the long run?

d) Suppose UCLA decides to regulate the number of such food trucks by issuing permits,

and issues only 3 permits. Given that each food truck still sells 200 burritos, what will be

the price of each burrito? What about profits per truck?