Economics 2120 Part II Test 2 Fall 2023 Professor Santos Q1. Illustrate a firm in perfect competition earning a normal profit in the short-run, indicate price and output quantity. Can a perfectly competitive firm make economic profit in the long run? Value 8 and Q2. Illustrate an industry in the long run with an economy of scales (decreasing costs). Indicate where the economy of scales begins or occurs on the LRAC. What 2 factors might contribute to economy of scales for this industry. Provide an example of a real-world firm or industry. Value 8 points. Part II of Test 2 is due Thursday November 2. Group work is acceptable for part 2 of the test and can be done prior to the test date. Students can also do this part of test 2 on November 2 exam time. .02423