40 price-taking firms engage competition in a market with demand QD = 15500 - 250P. A monopolist facing this demand curve would have a marginal revenue curve MR = 62 - Q/125.20 firms have the cost function C(q) = 90 + 10 + .1q2 and MC1 = 10+.2q, while the other 20 firms have C(q) = 90 + 15q +.1q2 and MC2 = 15+.24.
a. What is the supply function for an individual firm with C?
b. What is the supply function for an individual firm with Cz?
c. What is the aggregate supply function for all 40 firms? (Be careful to note the price(s) at which different groups of firms join the market.)
d. What is the equilibrium price and quantity in this market?
e. How much profit does a firm with C collect? A firm with Cz?
