Consider a firm that sells its product in a perfectly competitive market where the current market price is $3.80 per unit and the total market quantity is2560 units. The firms in the market have identical cost structures and the firm's cost structure is described by the following equations: TC=62.5+0.1q^2-0.2q and MC=0.2q-0.2

1) What quantity should the firm produce to maximize its profit?

2)What is the firm's profit at the profit maximizing level of output?

3)Currently, how many firms are trading in the market?

4)What can be said about the current market outcome? Are there any expected changes?

Currently the market is BLANK equilibrium. If there are no changes in any external factors, over time one would expect BLANK in the number of firms, and BLANK in the number of consumers. As a result, the market supply will BLANK and the market demand will BLANK. This will lead to BLANK in the market price and BLANK in the market quantity. The individual firm will BLANK quantity produced and sold as before, at a price BLANK $3.80.

BLANK has words such as a)decrease, b)an increase, c)change ambiguously, d)decrease e)equal to, f)greater than, g)increase, h)in a short run, i)in the long run, j)less than, k)no change, l)not change, m)not in

5)Suppose consumers' income increases (while the market price is $3.80), and consumers view this good as a normal good.

As a result of this event, what changes are expected in the market?

The increase in consumers' income would lead to BLANK price in the market demand and BLANK in the market supply. This will lead to

BLANK in the market price.

BLANK has words such as: a) a decrease, b) an ambiguous change, c) an increase, d) no change

6) Suppose consumers' income increases, and consumers view this good as a normal good.

As a result of this event, which price is likely to be the market price in the short run?

As a result of event, the current market price in the short run is BLANK.

BLANK has a)$1.80, b)$3.80, c)$5.80

7) Suppose consumers' income increases, and consumers view this good as a normal good.

As a result of this event (and with the market price being one of the following prices: $1.80, $3.80, or $5.80), what quantity should the firm produce to maximize its profit in the short run?

8) Suppose consumers' income increases, and consumers view this good as a normal good.

As a result of this event (and with the market price being one of the following prices: $1.80, $3.80, or $5.80), what is the firm's short run profit at its profit maximizing level of output?

9) Suppose consumers' income increases, and consumers view this good as a normal good.

As the market adjusts to its long run equilibrium, what changes are expected?

As the market adjusts to its long run equilibrium, one would expect firms to BLANK the market. At the market's long run equilibrium, the market price is BLANK and the market quantity is

BLANK 2560 units.

BLANK has words such as: a)enter, b) equal to, c)equal to $1.80, d)equal to $3.80, e)equal to $5.80, f)greater than, g)greater than $1.80 but less than $3.80, h)greater than $3.80 but less than $5.80, i)greater than $5.80, j)leave, k)less than, l)less than $1.80, m) neither enter nor leave

10) Suppose consumers' income increases, and consumers view this good as a normal good.

What is the long run equilibrium price?