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In a perfectly competitive industry, every firm has identical cost structure. The short-run total cost curve of an individual firm is STC(q)=40+10q+0.1q2. Currently there are 10 firms in the market. The market demand curve is D(P)=700-10P.
a) What is the equation of an individual firm's short-run supply curve?
b) What is the short-run equilibrium price and quantity in this market?
c) At the equilibrium, what is the total producer surplus in the market? What is the profit of an individual firm?
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