In a competitive market for candy, firms face the following costs:
\$1,000,000 to open a factory
To make a ton of candy, each firm must pay:
\$100 to workers
\$500 to buy sugar
\$100 in machine maintenance
Due to crowding in the factory, adding each ton of candy costs \$200 more in labor costs than the unit before. So, for example, making the first unit costs \$900 not counting the cost to open the factory, and making the second unit costs \$1100.
Assuming that the firms do not all shut down, how many tons of candy does each firm make in the long run?