Question

A market contains a group of identical price-taking firms

5. A market contains a group of identical price-taking firms. Each firm has a marginal cost
curve MC(Q) = 2Q, where Q is the annual output of each firm. A study reveals that each firm
will produce if the price exceeds $20 per unit and will shut down if the price is less than $20.
The market demand curve for the industry is D(P) = 240- P/2. At the equilibrium market
price, each firm produces 20 units. What is the equilibrium market price, and how many firms
are in this industry?

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