There are N firms in a market each with cost function, I = 1, 2, ..., N. There is a fixed cost of entry denoted by E. The inverse demand function is p = 10 - Q , where Q= q1 + q2+ q3 + .... qn

A. [10 points] Assume all N firm are in the market. Find the Cournot Nash equilibrium quantity produced by each firm, the market equilibrium price.

B. [5 points] What is the maximum number of firms (that can enter the market in terms of the entry cost E? The firms will not enter if the profit is negative.

C. [5 points] Find the range of values of E for which at least one firm will enter the market.

D. [8 points] Assume E = 4 & N = 2. Calculate the total social welfare at the equilibrium.