1. A firm’s marginal cost function is MC = – 5 + q, where q is the firm’s quantity
produced. Assume zero fixed cost. The market demand is Q = 500 – 25P, where
Q is the market quantity demanded and P is the market price.
a. What is the firm’s individual supply curve? Write an equation:
b. Suppose there are 20 identical firms in the industry. What is the market
supply curve? Write an equation:
c. Find the market equilibrium price and quantity:
d. Find the consumer’s surplus in equilibrium (write a number):

Question

1. A firm’s marginal cost function is MC = – 5 + q, where q is the firm’s quantity
produced. Assume zero fixed cost. The market demand is Q = 500 – 25P, where
Q is the market quantity demanded and P is the market price.
a. What is the firm’s individual supply curve? Write an equation:
b. Suppose there are 20 identical firms in the industry. What is the market
supply curve? Write an equation:
c. Find the market equilibrium price and quantity:
d. Find the consumer’s surplus in equilibrium (write a number):

anonymous · Answer

So far I got that in perfectly competitive market MC=P and my supply curve is q=p+5
then for market since 20 firms are same just multiply by 20 and Q=20P+100 for market supply.
Then I am kind of stuck: to find equilibrium Q and P , I did make both supply and demand equitation equal and find some crappy number. like 8.8888 for price, can you help me where is my error?

razor99 · Answer

First draw the curve
its would be really helpful

anonymous · Answer

Well, I did not really much info a got there, I am not sure where I going wrong.