2. In the long run in a perfectly competitive market, price equals marginal cost and rms earn no economic prots. The following two equations describe this longrun situation for prices and costs, where the numbers indicate the amounts of each input (labor and land) needed to produce a widget or a yard of cloth: ij-dgm = 3w + 21' Pmh = 4w + 1.? a. If the price of a widget is initially $25 and the price of yard of cloth is initially $30, what are the values for the wage rate (w) and the rental rate (r)? . Which good is land intensive? Briey explain. c. What is the labor cost of producing a widget? A yard of cloth? The price ofa widget now rises to $30 and the price ofa yard of cloth falls to $25. d. What are the new longrun values for w and r. e. Based on your calculations above, is the following statement true or false? When the relative price of a good increases, the real price of the factor used intensively in its production increases. Briey explain