(b)Assume that the market for prawn noodle is perfectly competitive and all sellers in the

marketareidenticalinthequalityandquantityoftheirprawnnoodles.Themarket

supply and demand curves for the prawn noodle market are as follows:

Demand function: P = 65-0.01Q and

Supply function, P = (1/1200)Q, where P is measured in dollar ($) and Q indicates

quantity of prawn noodles.

Thetotalcostforatypicalprawnnoodlestall,May'sPrawnNoodle,isTC=

55+(1/20)Q 2 .

(i)Compute with diagrams the equilibrium market price, the equilibrium market

quantity, the profit and quantity of output supplied by May's Prawn Noodle.

(ii)Examine with diagrams the effect of new entry or exit of prawn noodle sellers

on the long-run market equilibrium.