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Question: producing robots is a very specialized process which requires special...

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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: CA(q) = 400 + 809 g .

A type "B" firm has production costs Cp(g) = 800 + 20g + 2g2 .

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 P 200 /16?

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