Explain using an appropriate diagram, how a firm earning losses in the short run, will impact the long run equilibrium level ofoutput and profitability levels in the long run.

Explain whether or not a firm in perfect competition earning abnormal profits is productively and allocatively efficient.

How would a lump sum tax of $1000, which is placed on all firms as an environmental fee, affect marginal and total costs? Illustrate using a diagram.