Market Equilibrium Analysis
Consider a perfectly competitive market where all firms are identical and have the same cost function given by C(q) = q² + 16, where q is the quantity produced by a single firm. The market demand is given by Q_D = 240 - P.
Part A: If there are 10 firms in the market in the short run, what is the equilibrium price and quantity?
Part B: In the long run, firms can freely enter or exit the market. What is the long-run equilibrium price, total market quantity, and number of firms?
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