1. A firm in a perfectly competitive industry has fixed costs of FC=15, marginal costs of MC=5+14q, and average variable costs of AVC=5+7q.

(a) What are the firm's variable costs (VC)? (5 marks)

(b) What is the firm's total cost function? (5 marks)

(c) If the price is $75, how much does the firm supply? (5 marks)

(d) Does the firm continue to supply this quantity in the short-run? (5 marks)

(e) Suppose there exists a standard market demand function from consumers (downward slopping). Please provide a logical discussion about how the market achieves short-run equilibrium. (10 marks)