Suppose there is a perfectly competitive industry with a market demand curve that can be expressed as:
P = 100 - (1/10)Q
where P is the market price and Q is the market quantity. Furthermore, suppose that all the firms in this industry are identical and that a representative firm's total cost is:
TC = 100 + 5q + q2
where q is the quantity produced by this representative firm. The representative firm's marginal cost is:
MC = 5 + 2q.
(a). What is the average total cost for the representative firm?
(b). In the long run, how many units will this firm produce and what price will it sell each unit for in this market?