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The following market demand and firm cost conditions describe a perfectly competitive industry:
p = 100 - 0.0005Q
T C = 10q - 0.1q2 + 0.0005q3
(a) Find the firms short-run supply function.
(b) Explain the firm's shutdown rule.
(c) Suppose we are on the short-run and the num- ber of firms is 1000. Determine the equilib- rium price (p), market output (Q), and firm output (q). Briefly explain whether there will be entry or exit in the long run.
(d) Determine the long-run equilibrium price (p), market output (Q), firm output (q) and number of identical firms (N).
The equivalent annual worth (EAW) is most nearly:
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