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Assignment:
In the competitive peanut butter industry, each of 1000 identical firms has a short-run marginal cost curve given by MC = 6 + q. The demand curve for this industry is: P = 20 - (2Q/1000). What is the:
1. Equilibrium Price
2. Eqlilibrium Quantity
3. Consumer Surplus
4. Producer Surplus
5. If an outbreak of aflatoxin suddenly makes it impossible to produce any peanut butter, what will be the short-run total loss in consumer and producer surplus?
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