1. Assume pears are sold in a perfectly competitive market and firms are making zero economic profit. Explain and illustrate graphically, the effect of a decrease in market price on the short-run position of a single firm selling pears. (show individual firm graph only)
2. Based on the short-run position identified in Q1, explain and illustrate graphically the effect of entry/exit the long run position of the firm ( show both market and individual firm graphs)