Exercise 2 [23 points]: Consider a competitive market with 4 firms. Each
firm has a cost function of C = 25 + q^2 - q, where q is one firm's output.
The market demand function is Q^D = 44 - p, where p is the price.
1. Find each firm's individual supply for any possible price p > 0.
ii. Find the equilibrium price and equilibrium quantity supplied by each
of the 4 firms.
iii. Explain whether there will be entry or exit from this market.
Iv. Calculate the long run equilibrium price, quantity per firm, market
quantity and number of firms.
