Company Rho operates in a perfectly competitive market and is incurring economic losses.

1. Draw correctly labeled side-by-side graphs for the market and for Company Rho. Label the axes and:
2. the market price (P_E) and market quantity (Q_E)
3. the firm's quantity of output (Q_E)
4. the firm's average total cost (ATC)
5. completely shade the area of consumer surplus in the market
7. What will happen to the market price and Company Rho's profits in the long run if it remains in the market? Explain.