Each firm in a perfectly competitive market has long run average cost represented as AC(q) = 100q- 10+100/q. Long run marginal cost is MC=200q-10. The market demand is Qd = 2150-5P. Find the long run equilibrium output per firm, q*, the long run equilibrium price, P*, and the number of firms in the industry, n*.
A) q*=1; P*=190; n*=1200
B) q*=2; P*=240; n*=1200
C) q*=50; P*=15; n*=200
D) q*=100; P*=9991; n*=500
Correct Answer:
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