Homework Answers
MC = 2Aq + B
So, individual firm supply curve:
q = (P-B)/2A
Market supply curve , Qs = 90q
Qs = 45(P-B)/A
Qs = 45(P-100)/4
Qs = 11.25(P-100)
At eqm, Qd = Qs
11.25(P-100)= 1120-2P
13.25P = 2245
P*= 169.43
Q*= 11.25*69.43= 781
each Firm output = 781/90= 8.68
Then firm profit = 8.68*169.43 - ( 4*8.68*8.68 +100*8.68+167)
= 1470.5 - 1336.37
= 134.13
= $ 134.13 : permit price = profit of firm in short run
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