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How to find total cost in a perfectly competitive market

02/10/2021 Client: muhammad11 Deadline: 2 Day

In a perfectly competitive market, a firm has the following short-run total cost function:

C(q)=16+4q+q2

The market demand is

Q(p)=220-p

a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it.

b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market.

c. What is the market supply curve? What are the market equilibrium price and quantity?

d. In equilibrium, how much does each firm produce? How much is its profit? (It is short run, so it is possible for a firm to earn positive profit)

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