Hey all I desperately need help with this question. I've asked everyone I know at the house and my school to help me out but no one seems to know what to do. Thanks in advance.
Suppose the demand for a product can be written as P = 2,100 - 2Q. Assume the marginal cost in the long run is constant at $100 per unit.
- Initially, this product is produced in a perfectly competitive industry with each competitive firm choosing the optimal factory size q* = 20 units where the average cost per unit is the lowest in the long run. Demonstrate how to solve for the competitive equilibrium industry output Qc and price Pc, number of firms in the industry F, profits for each firm pi*(the actual pi symbol) and the industry Pi(the symbol)c, consumer surplus CSc, producer surplus PSc, and total surplus TSc.
(attached jpg of question as well)
since the marginal cost (MC) is constant (100) would that make the Pc equilibrium 100 and since the optimal size is 20 make Qc 20? Just my guess. Really having problems with this question.