3. Using diagrams for both the industry and a representative firm, illustrate competitive longrun equilibrium. Assuming constant costs, employ these diagrams to show how (a) an increase and (b) a decrease in market demand will upset that longrun equilibrium. Trace graphically and describe verbally the adjustment processes by which longrun equilibrium is restored.

4.Refer to Q3, now rework your analysis for increasingand decreasingcost industries and compare the three longrun supply curves.