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In the city of Gelato the market for ice cream is perfectly competitive. Aggregate demand for ice cream is:
where p is the price for one cone of ice cream. All ice cream producers in the city have the similar total cost function:
where Qi represents the number of ice cream cones firm i makes. Suppose that the market is in equilibrium.
a) Derive the firms' marginal and average cost.
b) Compute price and quantity in equilibrium.
Consider the following table. It shows the market shares of seven clothing stores (A to G) in five dissimilar cities. a) Calculate the Herfindahl index (?H) for each city.
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