Question: The box industry was perfectly competitive. The lowest point on the long-run average cost curve of each of the identical box producers was $4, and the minimum point occurred at an output of 1,000 boxes per month. The market demand curve for boxes was:

Q_D = 140,000 – 10,000P

Where P is the price of a box (in dollars per box) and Q_D is the quantity of boxes demanded per month. The market supply curve for boxes was:

Q_S = 80,000 + 5,000P

Where Q_S is the quantity of boxes supplied per month.

a) What is the equilibrium price of a box?

b) What is the equilibrium quantity of boxes in the market?

c) How many firms in the market?