Consider a competitive industry with several identical firms. The long run average cost of a firm producing q units of output is given by AC(q) = 10 − 6q + q 2 . Suppose factor costs are constant and there is free entry and exit. Suppose market demand is Q D(P) = 31 − P. where P denotes market price. Determine the number of firms in the industry in the long run equilibrium.

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