2. Prot maximization of a seller in a competitive pricessearchermarket Consider De Virtuose Cupcake, a cupcake shop in a competitive pricessearcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black paint (plus symbol) on the graph to indicate the profitimaximizing price and quantity. If the shop is making a prot, use the green rectangle (triangle symbols) to shade in the area representing its prot. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4 00 "I- . 3 50 Profit Maximizing Dutoome 3 00 B H X 8 250 D. 3 Prot 5 D. m 200 H E E L. 1 50 Loss m 0 E EL 1 00 0 50 a 0 0.5 1.0 1.5 2.0 2 s 3.0 3.5 4.0 QUANTITY (Thousands of cupcakes) more At the profitmaximizing output and price, the shop's prot is equ _ . (Hint: Be sure to enter a minus sign if prot is negative.) fewer Given the protmaximizing choice of output and price, there are V shops in the industry than there would be in longrun equilibrium. 2. Prot maximization of a seller in a competitive priceesearchermarket Consider De Virtuose Cupcake, a cupcake shop in a competitive pricesearcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost {ATC} curve. Assume that the shop is operating in the short run. Place the black paint (plus symbol) on the graph to indicate the protimaxr'mizing price and quantity. If the shop is making a prot, use the green rectangle (triangle symbols} to shade in the area representing its prot. If the shop is suffering a loss, use the purple rectangle {diamond symbols) to shade in the area representing its loss. 4.0:: "I- l 350 Prot Maximizing Outopme H Prot H Less 300 250 2.00 1.50 PM CE (Dollars per cupcake) 1.00 050 emand MR \\ u -r l l l l l l u a s 1,1) 1,5 2,0 2 s 3,0 3,5 4,0 QUANTITY (Thousands of cupcakes) At the profitimaximizing output and price, the shop's prot is equal to . (Hint: Be sure to enter a minus sign if prot is negative.) Given the profitrmaximizing choice of output and price, there are '7 shops in the industry than there would he in longrrun equilibrium