Question 1: Ten competitive widget makers each have the following cost structure:
Ci = 0.005qi2 + 4qi + 200 i = 1, 2,....,10
(1) What is the short-run supply curve for each firm?
(2) What is the industry supply curve?
(3) If market demand is:
Q = 6,500 - 500p
What are short-run equilibrium market price and quantity?
(4) At the price determined in (c), is the firm breaking even, making profits or losses?
(5) In the long-run, firms enter the industry -assume constant costs over long-run-what will be market price and quantity?
(6) How many firms will there be in the industry?