There is a perfectly competitive market for apples. There are 100 identical farms
in this industry and your farm is one of them. The industry’s demand function is
Qd=20,000-5000P .Your farm has a total cost curve of
where q is pounds of apples your farm produces and sells daily.
a. What is the short run market equilibrium price? (4%)
b. What quantity you should produce for maximum profit? (4%)
c. What is this profit? (4%)
d. Try to derive the maximal number of firms in the industry such that each
firm will reach the breakeven point where each firm will earn zero profit.
Further, derive the equilibrium price under this condition. (8%)