Each of the foods below tends to have an increase in demand in the summer months.

a). Where does a competitive firm's demand curve come from? Explain why a competitive firm is a price taker.

b). The Philadelphia water ice industry is a constant cost industry. The demand for water ice shifts outward each year when it gets hot. What are the steps by which the competitive water ice market insures an increased amount of water ice. Explain and graph at the industry and firm levels. What is the long-run price of water ice?

c). The Philly soft pretzel industry is likewise competitive. Just look at all the sellers of semi stale pretzels out in front of the stadiums in South Philly during normal times. The difference is that the pretzel industry is an increasing cost industry. Show the effect of a demand increase in the pretzel market both at the industry and the firm level.