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Unformatted text preview: How do you interpret these results? (3) Suppose that all the firms in a perfectly competitive industry have the following identical cost function: C = Q 3 Q 2 + Q. Show that their marginal cost function is given by MC = 3Q 2 – 2Q +1. (i) Express algebraically the average cost function for each firm. (ii) Find the longrun supply curve of this industry. (iii) Suppose that the market demand for the product of this industry is given by Q = 4P + 103. At equilibrium, how many firms will operate in this industry? (4) Pindyck, Rubinfeld and Koh, p. 385, #14. (5) Pindyck, Rubinfeld and Koh, p. 385, #15....
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 Spring '08
 Chen
 Microeconomics

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