PERFECT COMPETITION

You will use this info to answer this question plus the next 2 question.

Assume there are exactly 5firms in your market BUT (despite this) the market isperfectly competitive.

The market demand function is Q = 270 - 2*P. The market supply function is Q = 15+ P.

All firms have the same ATC curve, and it is this:

ATC = 88- .66Q + .02Q²

Based on the correct answer to the previous question (Question 13) and knowing that there are exactly 5firms in this market, and knowing that each firm has the same ATC curve and each firm is producing the same quantity, which of the following is closest to the current value of ATC for each firmin this market?

Multiple Choice

• $77.20
• $80.40
• $82.80
• $88.70

Given p=85 and q=100