Company Sigma operates in a perfectly competitive market and is earning a positive economic profit.

a. Draw correctly labeled side-by-side graphs for the market and for Company Sigma. Label the axes and:

1. the market price (PE) and market quantity (QE)
2. the firm's quantity of output (QE)
3. the firm's average total cost (ATC)
4. completely shade the area of Sigma's profit

b. What will happen to the market price and Company Sigma's profits in the long run if it remains in the market? Explain.