Your firm is one of 100 identical firms operating in the short run in a perfectly competitive market. Your total cost function (short run and long run) is C = 500 + 20 q + q2, and your marginal cost function is MC = 20 + 2q. The (short run and long run) market demand curve is given by Q = 4,500 – 5P.
a. Find the supply curve for your firm. Then, find the short-run market supply curve. Show work.
b.Find equilibrium price, P*, and quantity, Q*, in the market in the short run. Show work.
c.Find your firm’s total revenue, total cost, and profit in the short run. Show work.
d.Find the minimum efficient scale (MES) for your firm. Show work. Find the long-run equilibrium price in the market after entry or exit has occurred. Show work.