Suppose you are given the following information about a particular industry:
\[
\begin{array}{ll}
Q^{D}=6500-100 P & \text { Market demand } \\
Q^{s}=1200 P & \text { Market supply }
\end{array}
\]
$C(q)=722+\frac{q^{2}}{200} \quad$ Firm total cost function
\[
M C(q)=\frac{2 q}{200} \quad \text { Firm marginal cost function }
\]
Assume that all firms are identical and that the market is characterized by perfect competition.
a. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm.
b. Would you expect to see entry into or exit from the industry in the long run? Explain. What effect will entry or exit have on market equilibrium?
c. What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative, or zero at this price? Explain.
What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price? Explain.