A perfectly competitive potato farm is currently in long run equilibrium.

1. Graph the firm in long run equilibrium. Be sure to label all of the curves and the profit maximizing price and quantity.
2. The demand for potatoes increases. Draw a new graph that shows the impact on an individual firm. Be sure to shade the area of loss or profit.
3. Draw a new graph that shows how the firm and the industry adjusts to a new long run equilibrium.
4. How did the price and quantity in part A change in Part C? Explain your response