November 2011 paper Question 38

How to find the firm's profit (9) after finding equilibrium price and quantity?

I post the question and answer down, for your reference.

Answer: Equate Industry supply to industry demand
3(P‐1) = 41 gives P*=11, Y*=30, Firm profit=9, Industry profit=54 [4 * 0.5 = 2]

Question: http://imgur.com/cEMycyR (III part of the question)

 

Industry supply is 30, so each firm supply = 30/6 = 5. Total revenue for a firm = 11*5 = 55 and total cost = y^2+y+16 = 5^2+5+16 = 46. Hence, profit = 55-46 =9.

 

Thank you. Got it after a while, after posting.