Assume that car producers compete on a monopolistically competitive market. The fixed costs F associated with producing cars is 5 billion, and each car costs an additional 15 000 to produce. Price is defined as P = c + 1/bn = 15 000 + 300/n, where n is the number of firms in the industry, and all firms are symmetric (such that they all charge the same price and each produce 1/n of the market S, i.e., Q = S/n). The size of the US market is 300 million cars and the size of the European market is 533 million cars. Assume that the US and Europe start trading with each other. What is the equilibrium number of firms on the integrated market? a. 4

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