3. (7 points) Market demand is Qd Q = { +7, p = [0,a] 0, p>a (5) a,b>0. There are n competitive firms in the market. For i = 1,..., n, firm i hires l; units of labor at unit cost w>0, which yields qi a (0, 1). (a) Suppose that n = 1. = 21 units of output. Here, i. Find firm 1's supply as a function of p. (1 point) ii. Find the competitive equilibrium (p*, q) for any a (0, 1). (1 point) iii. Find the competitive equilibrium (p*, q) for a = 0.5. (1 point) (b) Suppose that n = 3 and a = 0.5. Suppose further that firm 1 is given a subsidy on production, i.e., for each unit of output produced by firm 1, the government gives s dollars to firm 1. i. For i = 1,2,3, find firm i's total cost, TC; (g). (1 point) ii. Find the competitive equilibrium (p*, 91, 92, 93). (1 point) iii. What is the effect of s on (p", q1,42,43)? (2 points)