Suppose that the fixed startup costs (to build the factory and buy equipment) for a firm producing MP3 players, a differentiated good, is $250,000

Subject:MarketingPrice:2.88 Bought3

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Suppose that the fixed startup costs (to build the factory and buy equipment) for a firm producing MP3 players, a differentiated good, is $250,000. Variable costs (labor and materials) are $10 per MP3 player produced.

The market price in dollars is given by P = 10 + (1n1n), where nn equals the number of firms serving the market. Assume that each firm serves an equal fraction of the market.

Suppose that the country Gamma has a population of 10,000 people. Find the number of firms producing MP3 players under autarky and the equilibrium price.