Homework Answers
Individual SS curve:
P = 10 + q
q = P - 10
Since, there are 5 firms.
So, industry output Q = 5q
where q = individual firm output
Market Supply:
Q = 5(P - 10)
Q = 5P - 50
at equilibrium,
DD = SS
5P - 50 = 106 - P
6P = 156
P = 26
Q = 106 - 26
Q = 80
Producer Surplus = Area of shaded region
= 0.5 * (26-10) * 80
= 640
Hence, 1st option is correct
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