Part 1 (5 marks in total) Assume that a firm in a perfectly competitive industry faces a prevailing market price of $50 and has the following total cost schedule: Quantity TC TR Profit/Loss MC MR 0 400 20 800 40 1, 100 60 2,000 80 3.000 100 4,500 120 7,000 130 10,000 140 15,000 a) Complete the schedule above. (2 marks)MONASH BUSINESS SCHOOL b) How much should this firm produce in order to maximize profit and how much would its profit be? Explain using the concepts of MR and MC (1 mark) c) Is the firm in a long run or short run equilibrium? Explain (1 mark) d) Given the circumstance in question 3c) if new firms were attracted to this market, what would be the main consequence for this competitive firm in terms of prices received; quantity produced and profit? (1 mark) 2 | Assignment 2 ECF1 100 Microeconomics 51 2023 2023 Monash Business SchodMONASH BUSINESS SCHOOL Part 2 (5 marks in total) Cutting Edge Pharmaceuticals Pty Lid (a monopoly firm) has the following demand (average revenue) function: AR = 100 - Q The marginal cost of production is constant and equal to $10. a) What is the equation for the MR function? (1/2 mark) Determine the profit maximizing level of output of the firm (1/2 mark) b) What is the equilibrium monopoly price set by the firm (1/2 mark) and what will be the monopoly profit eamed? (1/2 mark) c) Illustrate and label the market demand and marginal cost, average cost of this firm as well as, profit maximizing price and quantity and profit level on a diagram (3 marks ) 3 Assignment 2 ECF1 100 Microsconomics 31 2023 2023 Monash Business Schod