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Q1: Suppose a representative firm in a perfectly competitive market has short-run total costs of TC = 0.5q^2 +7q
a) Find the firm's short-run supply curve.
b) Find the market supply curve if there are 200 firms in the industry.
Q2: There are 130 firms in a perfectly competitive market, with supply curves of q = 0.3P - (100/13).
Market demand is given by Q = 600 - P
a. Find the equilibrium market quantity and price.
b. We can show that the firm's total cost equals . Given this cost curve, and your result from above, would firms enter or exit this market? Show me using algebra how you know (hint: what do firms want above all things?).
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