Suppose that fixed costs for a firm in the automobile industry (start-up costs of factories, capital equipment, and so on) are $7.5 billion and that variable costs are equal to $20,000 per finished automobile. Because more firms increase competition in the market, the market price falls as more firms enter an automobile market or specifically, P = 20,000 + 200 >n, where n represents the number of firms in a mar- ket. Assume that the initial size of the U.S. and the European automobile markets are 400 million and 650 million people, respectively.


Calculate the equilibrium number of firms in the U.S. and European automobile markets without trade.