Question: Please help with this question. 6. Competitive equilibrium Market demand is 5 - P, PE [0, 5] p > 10 (3) There are n competitive

Please help with this question.

6. Competitive equilibrium Market demand is 5 - P, PE [0, 5] p > 10 (3) There are n competitive firms in the market. For i = 1, ...,n, firm i's total cost of production is TCi (qi) = cqi + 97/2 where c E (0, 5). That is, the n firms have IDENTICAL total cost functions. (a) Find the competitive equilibrium (with a fixed number of firms), {p*, {q{}2 1} = {p*, qi, q2, ..., q ). Show your work. Hint: in equilibrium, q1 = q2 = ... = In. (b) What is the effect of c on p*? 8

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