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Assume that the industry for pickles is perfectly competitive. There are 150 producers. 100 of the...

Assume that the industry for pickles is perfectly competitive. There are 150 producers. 100 of the firms are “high-cost,” with short-run supply curves Qhc = 4P, while the others are “low-cost,” with short-run supply curves Qlc = 6P. Quantities are measured in jars and prices in dollars.

A. Derive the short-run industry supply curve for pickles.

B. Assume the market demand curve for pickles is given by Qd = 6,000 – 300P. Find the market equilibrium price and quantity.

C. At this price, how many pickles are produced by the high- and low-cost firms, respectively?

D. Determine total industry surplus at the equilibrium.

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