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4) In the perfectly competitive gadget industry there are 10 firms with identical costs given by...

4) In the perfectly competitive gadget industry there are 10 firms with identical costs given by C = 500 + 20q + q2, none of which believes it can alter price. Marginal cost is given by the function MC=20 + 2q.

a. Find the shutdown point of one of these firms. Be sure to explain what you are doing. (5 points)

b. If price equals $400 what is the profit maximizing level of output for an individual firm? (5 points)

c. Find the short run industry supply function and explain how you got it and what it represents. (You will have an equation for part of your answer.) (5 points)

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