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The wood-pallet market contains many identical firms, each with the short-run total cost function STC(Q) = 400 + 5Q + Q2, where Q is the firm’s annual output (and all of the firm’s $400 fixed cost is sunk). The corresponding marginal cost function is SMC(Q) = 5 + 2Q. The market demand curve for this industry is D(P) 262.5 - P/2, where P is the market price. Each firm in the industry is currently earning zero, economic profit. How many firms are in this industry, and what is the market equilibrium price?
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