Suppose that there are 80 firms in a market, each with the following cost functi

Question

Suppose that there are 80 firms in a market, each with the following cost function:
C(q) = 100 + 4q^2

A.) Derive the short-run market supply curve.
B.) Suppose the market demand is
Qd= 1280 - 30P
Find the equilibrium market quantity and price.
C.) How much output will each firm produce? How much is each firm making? Suppose that there are 80 firms in a market, each with the following cost function:
C(q) = 100 + 4q^2

A.) Derive the short-run market supply curve.
B.) Suppose the market demand is
Qd= 1280 - 30P
Find the equilibrium market quantity and price.
C.) How much output will each firm produce? How much is each firm making?

Explanation / Answer

dTC/dQ=8Q, P=8Qs, supply curve of each firm.
Supply curve of the market=8x80Qs or P=640Qs or Qs=0.00156P
Qd=Qs, 1280-30P=0.00156P,30.00156P=1280
P=1280/30.00156=42.66
Q=1280-1279.93=0.07
Q/80=0.07/80=0.000875.

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