Y5

30-33. A (typical) firm in a perfectly competitive constant cost industry has total costs in the short run given by: TC =1200 + 36q + 3q2 , q 2 FC = 525

where q is output per day and TC is the total cost per day in dollars. The firm has fixed costs of $525 (already included in the TC equation above). The TC equation generates minimum average costs of $156 (per unit) at q = 20. You are also told that this size firm generates minimum long run average costs (that is, minimum LRAC occurs at q = 20, with min LRAC = $156). There are 200 firms in this industry in the short run. Suppose that the demand curve facing the industry is given by the equation P = 356 - .02Q where P is the price per unit and Q is the number of units demanded per day. Presently there is no international trade in this product. Questions 30 through 33 concern this firm and this industry. 30. Suppose this industry is in short run equilibrium, how much will be the total Gain to Society per day from production and consumption in this industry (Note: - Answers are in thousands of dollars)?

please prove that the answer is 1024