There are two questions to this problem set please answer both:

1.)

All firms in a competitive market have identical cost structures, each defined by the cost function C(q) = 10 + 8q + 0.25q 2, where q defines the output of an individual firm. How much does each firm produce at a market price of p=15? [Hint: remember that firms only produce where MC>AVC]. 1 1.5 14 OAll firms in a competitive market have identical cost structures, each defined by the cost function C(q) = 10 + 8q + 5q , where q defines the output of an individual firm. Suppose there 20 identical firms in this market. Further, assume the market faces an aggregate demand function Q - 152 -4p. What is the aggregate supply function in this market? Q - 0.1p - 0.8 Q - 2p - 16 Q - 8 + 200Q Q - 0.005p - .04p