Question: Suppose a representative firm in a perfectly competitive, constant cost industry has a long run cost function TC=4q 2 +100q+100. The market demand function is

Suppose a representative firm in a perfectly competitive, constant cost industry has a long run cost function TC=4q2+100q+100.

The market demand function is Q=1000-p.

a. Draw two diagrams, one for the market and one for a representative firm.

b. What is the long-run equilibrium price for this industry?

c.Determine the long run equilibrium quantity per firm and market quantity.

d.Determine the long run number of firms.

e. If market price is p=120, what will be the output of each firm? Why?

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