A perfectly competitive firm in the short-run & long-run Q.9 The market is perfectly competitive and there are 1,000 firms that produce paper. A table below sets out the market demand schedule for paper and cost schedule for paper producing firm when it uses its least- cost plant. PRICE MARKET EACH FIRM'S MARGINAL AVERAGE AVERAGE (DOLLARS QUANTITY OUTPUT COST (DOLLARS VARIABLE COST TOTAL COST PER BOX) DEMANDED (BOXES PER PER (DOLLARS PER (DOLLARS PER (BOXES PER WEEK) ADDITIONAL BOX) BOX) WEEK) BOX) 3.65 500,000 200 6.40 7.80 12.80 5.20 450,000 250 7.00 7.00 11.00 6.80 400,000 300 7.65 7.10 10.43 8.40 350,000 350 8.40 7.20 10.06 10.00 300,000 400 10.00 7.50 10.00 11.60 250,000 450 12.40 8.00 10.22 13.20 200,000 500 20.70 9.00 11.00 a) What is the market price of paper in the short run? b) What is the economic profit made or economic loss incurred by each firm? C) Do firms have an incentive to enter or exit the market in the long run? What is the number of firms in the long run