Consider a competitive industry with several identical firms. The long run average cost of a firm producing q units of output is given by AC(q) = 20...
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2. Consider a competitive industry with several identical firms. The long run average

cost of a firm producing q units of output is given by

AC(q) = 20 + 3q2 − 12q.

Suppose factor costs are constant and there is free entry and exit. Suppose market

demand is

QD = 30 − P.

where P denotes market price. Determine the number of firms in the industry

in the long run equilibrium.

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