1. In the long-run equilibrium of a competitive market, the market supply and demand are:
Supply: P = 20 + 0.50Q
Demand: P = 50 - 1.5Q,
where P is dollars per unit and Q is rate of production and sales in hundreds of units per day. A typical firm in this market has a marginal cost of production expressed as:
MC = 2.0 + 15q.
a. Determine the market equilibrium rate of sales and price.
b. Determine the rate of sales by the typical firm.
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