I) Consider the market for a particular type of financial service. Assume 1) all firms are identical and 2) it is a perfectly competitive market. Further, assume the industry is a constant cost industry. Each firm’s total cost function is TC = 2q^3 – 30q^2 + 150q. (i) What is the long run equilibrium price and quantity for each firm? (ii) The industry demand function is Qd=10000-10p. How many firms are there in the industry in the long run? (iii) The demand has changed to Qd=6000-4p. How many firms are there in the industry now in the long run?

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