There are currently 10 identical firms in the perfectly competitive gadget manufacturing industry. Each firm operates in the short run with a total fixed cost of F and total variable cost of 2q^2 , where q is the number of gadgets produced by each firm. The marginal cost for each firm is MC = 4q. Each firm would just break even (earn zero economic profit) if the market price were 40. (Note: the equilibrium price is not necessarily 40 when there are 10 firms in the market.) The market demand for the gadgets is Qd = 180 - 2.5P

a) Write down the short-run supply schedule for an individual firm. Draw it on a clearly labelled diagram.

b) What is the equilibrium price when there are 10 firms currently in the market? How many firm will be producing at this equilibrium, and what profits will they earn? Show the profits earned by an individual firm on a clearly labelled diagram with the appropriate cost curves.