Question: producing robots is a very specialized process which requires special...
Producing robots is a very specialized process which requires special factories.
There are two ways to produce robots (process A and process B).
It turns out that there are exactly 100 locations where you could build a type-A production facility and 100 locations where you could build a type-B facility.
That is, in this industry, there are a maximum of 100 type A firms, and 100 type B firms.
A type "A" firm has production costs: .
A type "B" firm has production costs .
These costs are the most efficient way of producing output in the long-run.
Firms in this industry are price takers.
a) What is the long-run equilibrium price and quantity in this market if demand for robots is given by ?