1.(3 questions) A firm in a perfectly competitive industry has the following total cost function:

TC= 8,000 + 300Q 25Q²+Q³

The market demand and supply functions are respectively given by

Q_D= 600P+ 460,000

Q_S= 700P60,000

a.Determine the market equilibrium price and quantity.

b.Determine the profit-maximizing output level for the firm.

c.Suppose there was a decrease in demand and the demand function became

Q_D= 600P+ 120,000

Should the firm produce at the new equilibrium price in the short run? Or shut down? Why?