Question: The market for hamburgers in one faraway state is characterized by perfect

Competition. Firms and consumers are price takers and there is free entry and exit. There are large numbers of buyers and suppliers. Assume this industry is a constant cost

Industry.

The demand for hamburgers is P=20- Q and the supply curve is P=Q where Q is

Measured in hundreds of hamburgers per day.

a. Find the equilibrium price and quantity in this market.

b. Compute the consumer surplus and producer surplus in this market.

c. What is the farmer's fixed cost? What is the equation giving the farmer’s? Variable cost as a function of quantity?

d. Write the equations for the farmer's average total cost (ATC) and average Variable cost (AVC), both as functions of Q. Show the ATC, AVC, and MC on One graph.

e. Find the quantity produced by each firm in the short run. How many firms are

They’re in the market?

d. Find the economic profits. Is the observed price sustainable in the long run?

e. What happens to this market in the long run? Will there be entry or exit of firms In this market? Explain

f. What is the long run price and quantity in this market? What is the long run quantity produced by each firm in this market?