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Suppose that there are 120 perfectly competitive bakeries in a Pennsylvania that bake cakes, each with the following cost function: C(q) = 108 + 3q2 a. Derive the short-run market supply curve. b. Suppose the market demand is, QD = 900−10p. Find the equilibrium market quantity and price. c. How much output will each firm produce? How much profit is each firm making? d. What do you believe will happen to the number of firms in this market in the longrun? What price do you expect cakes to be sold for in the long-run?
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Suppose that there are 120 perfectly competitive bakeries in a Pennsylvania that bake cakes, each wi...
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