Answer Happy

The production of cable is standard. The following marginal cost
function of a typical firm MC(q) is (in dollars and same for
all firms).
MC(q) = 0.2q
where q is the output of an individual firm. The fixed
cost of a typical firm firm is X (in dollars and same for all
firms). The market demand curve is given by
Q = 108000 − 1000P
(a) Initially, the market is in the long-run equilibrium, and
there are 1000 identical firms in the market. The long-run market
equilibrium price is $[
Answer ].
(b) Continue from the previous question. The long-run
market equilibrium quantity is [ Answer
] units.
(c) Continue from the previous question. The total cost of
production of a representative firm is $[ Answer
].
(d) Consider two firms in a competitive market. The
following table shows the marginal costs of the two firms.
Marginal Cost ($)
Output
Firm 1
Firm 2
1
4
4.5
2
5
5.5
3
7
6.5
4
8
7.5
5
10
8.5
6
11
9.5
7
13
10.5
8
14
11.5
If the equilibrium price falls strictly between $[
Answer01 ] and $[ Answer02],
the two firms will produce a total of 12 units and the allocation
of production will be efficient.
(e) Continue from the previous question. When firms 1 and 2
produce a total of 12 units, the socially optimal quantities
produced by firm 1 is[ Answer01 ] unit(s) and
by firm 2 is [ Answer02]unit(s).