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Perfectly Competitive Firm and Industry Supply
New England Textiles, Inc., is a medium- sized manufacturer of blue denim that sells in a market for which it is perfectly competitive. The total cost function for this product is described by the following relation:
TC = $25,000 + $1Q + $0.000008Q2:
MC = DTC/DQ = $1 + $0.000016Q
where Q is square yards of blue denim produced per month.
A. Derive the firm's supply curve, expressing quantity as a function of price.
B. Derive the industry's supply curve if New England Textiles is one of 500 competitors.
C. Calculate industry supply per month at a market price of $2 per square yard.
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