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###### Number 6 6. (12 pts) Gasoline is sold through local gas stations under perfectly competitive conditions....

number 6

6. (12 pts) Gasoline is sold through local gas stations under perfectly competitive conditions. All gas station owners face the same long-run total cost function given by: | LRTC = 0,01g - 29+1014 Where is the number of gallons sold per day. (a) Assuming the market is in long-run equilibrium, how much gas will each firm sell per day? What is the value of long-run average cost at this output level? What is the long run equilibrium price? (b) The market demand for gasoline is given by: Qp = 2,500,000 - 500,000P Where Op is the number of gallons demanded per day and P is the price per gallon. Given your answer to part (a), how much gasoline will be demanded and how many gas stations will there be?

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