HWS: Due 11/21/12 1. Suppose the breakfast cereal market, which is typically considered as monopolistically competitive, is now in its long run equilibrium. Recent research found evidence for the benet of cereal on the heart healthiness of human beings, and therefore the market witness a surge in the demand for all breakfast cereal products. a) Illustrate on a graph how the price and output levels are determined for a representative firm in this market in the current long run equilibrium. b) With the surge in market demand, which curve(s) in your graph would shift? In which direction? 0) With the change(s) in b), will the output and price levels of the representative firm change accordingly in the short run? (1) As time goes by, what will happen in the new long run equilibrium of this market