Suppose there are 100 firms each with a short run total cost of STC = q² + q + 10,so that marginal cost is MC = 2q +1.If market demand is given by Q_D = 1050 - 50P,total revenue to each firm will be

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To find the optimal quantity to produce, we equate marginal cost to marginal revenue (MR) which is equal to the price in a perfectly competitive market. MR = P = Q_D/100 - (1050 - 50P)/100 Simplifying this expression, we get P = 21 - Q/20. Setting MC equal to P and solving for q, we get q = 10. Total revenue for a firm is TR = P*q = (21 - Q/20)*10. When Q = 50, TR is maximized at 55. Therefore, the best choice is C) 55.

Suppose There Are 100 Firms Each with a Short Run