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Suppose there are 200 identical firms in a perfect competitive industry. Moreover, assume that each firm has the following short run cost function: C(q) = 0.5q2 + 5q + 20.
a) Compute the short-run supply curve for a single firm, expressing q as a function the price P.
b) Calculate the short-run industry supply curve.
c) Now assume that the market demand is given by QD = 1000 - 50P. Compute the short-run equilibrium price and its corresponding quantity.
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