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Assume that a firm faces the following cost function:
TC= 450 + 10q^3 − 5q^2 + 20q
a) Derive the supply curve for this individual firm.
b) If market price is equal to p=40 what quantity would be supplied?
c) Calculate profit at p=40.
d) What would be quantity supplied if p=20?
e) With free entry and exit and identical firms what would be the long term supply curve for this industry?
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Elucidate why the equilibria found in part (a) are only short-run equilibria. What will happen in the long run.
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