Problem 3

Consider a perfectly competitive industry for lentils, which initially contains 60 firms. Each firm i has a total cost function given by the equation TCi = 100 + qi2, where qi is the amount of lentils in tonnes produced by each firm.

Suppose that the industry demand function is given by Q = 1000 – 10P, where Q is the industry-wide output.

a) Write an expression for the marginal cost and average total cost functions for a representative firm. [4 marks]

b) Derive the industry supply curve. What is short-run output and price in the industry? How much does each individual firm produce? [4 marks]

Can someone please answer these questions quickly. I have my mid semester exam tommorrow