The market demand for chocolate is given by: Q =20-P
The chocolate market is perfectly competitive and there are 16 firms in the short run.
8 of them have a total cost function of:
C1 (q) = 2 · q^2
while the other 8 have a total cost function of:
C2 (q) = 4 · q^2
Calculate the equilibrium price and quantitiy in the chocolate market.
How much does a firm of each type produce? Calculate the consumer and producer surplus? What is the producer surplus for an individual firm of each type?