How is the equilibrium number of firms determined in a market where entry and exit are permitted?

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Solution

Let X = Equilibrium Quantity

and $X_{F} =$ Supply of each firm

$∴$ Formula for calculating equilibrium number of firms (N) is

$N = \frac{X}{X_{F}}$

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How is the equilibrium number of firms determined in a market where entry and exit are permitted?

Let X = Equilibrium Quantity and XF= Supply of each firm ∴ Formula for calculating equilibrium number of firms (N) is N=XXF

Let X = Equilibrium Quantity

and $X_{F} =$ Supply of each firm

$∴$ Formula for calculating equilibrium number of firms (N) is

$N = \frac{X}{X_{F}}$