Nolita photo print lab: A friend of yours is thinking of opening a photo print lab in Nolita and would like your advice. Although the photo print market in Manhattan is very competitive, she claims there is room for more entrants. She also tells you that the market demand for photo prints is given by Q(P) = 20 2P and that the cost function of a photo print lab (they are all the same) is C(q) = 1 2 + q + q 2 2 Price is measured in dollars per print. Quantities are measured in thousands of prints per week. The capital "Q" in market demand is a reminder that this is the demand curve for the whole industry. Assume that, in the short run, the following two conditions hold: (i) there are 8 labs operating and (ii) the fixed cost is a sunk cost. (a) Derive the equation of the short-run average variable cost (SAVC) and marginal cost (SMC). (b) What is the minimum level of the short-run average variable cost? (c) Draw the SAVC and SMC curves, showing their most important qualitative features. Make sure to label the axes and all the relevant points. (d) What is the short-run supply curve for a single lab, sSR(P)? (e) What is the short-run market supply curve, SS(P)? (f) What is the short-run equilibrium? (g) What is the short-run profit of each individual firm? (h) What would you tell your friend? Explain. (i) What is the short-run surplus of each individual firm? (j) What is the short-run market-level producer surplus? (k) Derive the equation of the long-run average cost (LAC) and marginal cost (LMC). (l) What is the minimum level of the long-run average cost? (m) Draw the LAC and LMC curves, showing their most important qualitative features. Make sure to label the axes and all the relevant points. (n) What is the long-run supply curve for a single lab, sLR(P)? (o) What is the long-run equilibrium price? How many labs will operate in this market in the long run? (p) What is the long-run profit of each individual firm? (q) What is the long-run surplus of each individual firm? (r) What is the long-run market supply curve, LS(P)? (s) What is the long-run market-level producer surplus? (t) What is the long-run market-level economic rent?