Suppose that there are 1,000 firms in a perfectly competitive industry, each with a short-run total cost curve given by TC = 800 + 8Q + 0.1Q² and marginal cost curve given by MC = 8 + 0.2Q. The short-run profit-maximizing output level for each firm at a market price of $20 is ____.

Question

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In a perfectly competitive market, firms maximize profit where price equals marginal cost (P = MC). Given the market price of $20, we set the marginal cost (MC) equal to the price to find the profit-maximizing output level: $20 = 8 + 0.2Q. Solving for Q gives Q = 60.

Suppose That There Are 1,000 Firms in a Perfectly Competitive