What is the market clearing price

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United States production of USB flash drives is dominated by two firms, Lexarand Corsair. Both firms have a production cost of C(q) = 100 + q2(where q is in millions).They face stiff competition from ten Chinese producers. The Chinese firms each have a costof C(q) = 20q, but their production capacity is limited to 2 million units each, q = 2, or20 million total. Demand for USB flash drives in the US is determined by the functionD(p) = 50 - p.

Assume that Lexar and Corsair act as perfectly competitive firms and that Chinesegoods flow freely into the United States. Draw the aggregate (e.g. including all firms)supply curve for this industry in the space below. What is the market clearing price?

Reference no: EM131439865

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