4. (14 points total) The Perfectly Competitive Firm (a) (5 points) Draw a graph that illustrates the circumstance of a firm in a Perfectly Competitive Industry which is operating with a positive profit in the short-run. On your graph show: . The Marginal Cost Curve (you should assume this is an upward-sloping curve) . The Average Cost Curve . The Price . The optimal quantity given the price and cost structure . The area indicating the profit earned by the firm (b) (5 points) Draw a graph that illustrates the circumstance of a firm in a Perfectly Competitive Industry which is operating at a loss but which nevertheless does not immediately exit the industry. On your graph show the same items you graphed in the previous part but this time indicate the area indicating the loss earned by the firm. (c) (4 points) Describe in words, why the situation you depicted in Part a), where the firm earns a profit is not an equilibrium in the long run