Firms operating in short run in perfectly competitive market

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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 = 800 + 25 q + 0.5 q2, and your marginal cost function is MC = 25 + q. The (short run and long run) market demand curve is given by Q = 2,750 – 5P. a. Find the supply curve for your firm. Show work. 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 the lowest price at which your firm will not exit the market in the long run. Show work. Referring to your answer in part b, should your firm exit the market in the long run if P* in the market does not increase over time? Explain. d. If you choose not to exit, how many firms (including your own) do you expect to be in the market in the long run? Show work, and explain.

Reference no: EM131099854

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