A firm in a perfectly competitive market has the following cost curve: TC = 200 + Q + 2Q^2; The market demand is: Qd = 121 − P. There are 20 identical firms in the market (N =20) in the short-run.
a) What is the firm’s supply function? b) What is the market supply function in the short-run? c) What is the market equilibrium price and quantity in the short-run? d) What is the quantity that the firm produces in the short-run?
e) At the equilibrium price found in part (c), how much profit is each firm making in the short-run? Will there be entry or exit in this market in the long-run? f) What is the price of the product in the long-run? g) How many firms are there in the market in the long-run? h) How much profit is each firm making in the long-run?