Assume that the market for apple cider in New York state is perfectly competitive, with demand curve P = 6 0.000475QD and a supply curve P = 0.80 + 0.000045QS. All identical producers have a variable cost curve given by V C = 0.8q + 0.00225q 2 , and marginal cost of MC = 0.80+0.0045q. Fixed costs are $22.5. Make sure to pay attention to the number of zeros in all equations!

a) Graph the supply and demand curves. Make sure you show two points on each line. Use the blank page provided and put this on the left side of the page, leaving room for the graph for the individual firm on the right.

b) Graph the firms AVC, MC, and MR curves for the firm. Put these on the right next to your graph from part (a).

c) What is the profit maximizing quantity of output for the firm?

d) What is the profit at the profit maximizing level of output?

e) What is the shut-down price for the firm?

f) Is the market in long-run equilibrium? Why or why not?