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An industry has 100 firms. These firms have identical production functions. In the short run, each firm has fixed costs of $400. There are two variable factors in the short run and output is given by y= (min(x1,4x2))1/2. The cost of factor 1 is $4 per unit and the cost of factor 2 is $2 per unit. In the short run, the industry supply curve is given by:
(a) Q= 100p/9
(b) Q= 100p/8
(c) Q= 600p1/2
(d) the part of the line Q= 50(min(4,8)) for which pQ >400/Q
(e) None of the above.
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