A market contains many identical firms, each with the short run total cost function STC(Q) = 400 + 5Q + Q2, where Q is the firm's annual output (and all of the firm's $400 fixed cost is sunk). The market demand curve for this industry is Q = 262.5 - P/2, where P is the market price. Each firm in the industry is currently earning zero economic profit.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.7P
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A market contains many identical firms, each with the short run total cost function STC(Q) = 400 + 5Q + Q2, where Q is the firm's annual output (and all of the firm's $400 fixed cost is sunk).  

The market demand curve for this industry is Q = 262.5 - P/2, where P is the market price. Each firm in the industry is currently earning zero economic profit.  

How many firms are in the industry and what is the market equilibrium price?

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