### How much output will each firm produce

##### Reference no: EM131274037

Suppose there are n identical firms in a market.  Each firm's cost function is given by C = 648 + 8q2, where q is the amount that an individual firm produces.  This means that an individual firm's marginal cost is given by MC = 16q.  Also, the market demand is given by P = 306 - 3Q, where Q is the total amount of the good produced by all of the firms combined.  Therefore, Q = n*q.

a) How much output will each firm produce?

b) What will be the market price?

c) How many firms will there be in long run equilibrium?

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