IV. A. Assume a Purely competitive Firm: Use a supply and demand graph, and a set of average cost curves, to illustrate this firm making normal profits. Be sure to label everything. Be sure to indicate the price and output of the firm. Now, assume some bad news causes the demand curve for this firm's product to fall. Indicate all of the changes on your graphs. Mark your changes with arrows so that I can tell the originals from the changes. Supply and Demand Average Cost Curves B. Assume a Monopolistically Competitive Firm: Use a Demand Curve, and a set of average cost curves, to illustrate this firm making economic profits. Be sure to label everything. Be sure to indicate the price and output of the firm. In the second graph illustrate how this firm's graph will change as time goes by. rice