A market contains a group of identical price-taking firms


A market contains a group of identical price-taking firms. Each firm has a marginal cost curve SMC(Q) = 2Q, where Q is the annual output of each firm. A study reveals that each firm will produce if the price exceeds $20 per unit and will shut down if the price is less than $20 per unit. The market demand curve for the industry is D(P) = 240 − P/2, where P is the market price. At the equilibrium market price, each firm produces 20 units. What is the equilibrium market price, and how many firms are in this industry?

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Microeconomics: A market contains a group of identical price-taking firms
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