### Competitive industry is comprised of identical firms

##### Reference no: EM1319538

Q1. Assume a monopolistic competitor in long-run equilibrium has a constant marginal cost of \$6 also faces the Demand curve given in the following table:
Q 20 18 16 14 12 10 8 6
P \$ 2 4 6 8 10 12 14 16

a. Illustrate what output will the firm choose?

b. Illustrate what will be the monopolistic competitor's average fixed cost at the output it chooses?

Q2. a competitive industry is comprised of 15 identical firms, each with a short-run total cost function of c(q)=722+q(squared)/200. Market Demand is 7000-250p=Q(p). Find the competitive equilibrium is?

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