2. The market for gas is perfectly competitive with identical firms. Market demand is downward sloping. Each firm has the typical cost curve shapes. The market is currently in long-run and short-run equilibrium. To help themselves in the upcoming elections, the government imposes a per-unit subsidy of $1 on gas. The subsidy is paid to consumers. 2a). What is the short-run impact of the subsidy on (1) Market price, (2) Market quantity, (3) Firm Quantity and (4) Number of firms in the gas market. Complete the diagrams below to show the Short-run impact on the market and the firms. (Draw the graph and label it) MARKET FIRM Q Q 2b). What is the long-run impact of the subsidy on (1) Market price, (2) Market quantity, (3) Firm Quantity and (4) Number of firms in the gas market. Complete the diagrams below to show the Short-run impact on the market and the firms. (Draw the graph and label it) MARKET FIRMQ3 Scenario - Yoga classes: perfectly competitive. constant cost industry with identical [inns . 1 yoga class has 1 instructor and 2t} students - New law introduced: max in students per class - What is the eect on market price, market quantity. rm quantity. and number of i'n'ms in the short run and long. run? MARI-{Er [Draw the graph and label it} 4. Consider the perfectlyr competitive donut market. Market Demand is the usual downward-sloping curve and Market Supply, the usual upward sloping curve. Two changes happen in this market. [1} Consumers get more health conscious and are less willing to pay for donuts at eyeryI quantity. {2] The cost ofsugar used in donut production decreases. 4A]. what is the SHORT-run impact of these two changes on [1} market price, [2} market quantity, E33 firm quantity and {4] number of firms in the market. Explain your reasoning using a clearly labeled diagram. A diagram alone is not sufcient, you need to explain your reasoning as well. [Draw the graph and label it} 433. what is the LUNG-run impact of these two changes on [1} market price, [2} market quantity, 33 firm quantity and {4] number ofrms in the market. Explain your reasoning using a clearly labeled diagram. A diagram alone is not sufcient, you need to explain your reasoning as well. [Draw the graph and label it}