Please help our assignment for microecon

31-1: Moving toward Long-run Equilibrium: Consider a perfectly competitive industry in the diagram below. The left panel of the diagram depicts the induster aggregate supply and demand curves, currently at $1 and D], res pectivelv. The right panel of the diagram depicts the cost curves of a typical prot-maximizing rm in this industry. Since we are dealing with long-run adjustments, all inputs are variable and, thus, the ATC curve is the same as the AVG curve. l1} l2} l3} l4} l5} {6} Price 5 Individual Firm 516 $18 $15 814 0.9K Market Quantity, 0 [in millions) What is the industry's equilibrium price and quantity? (Hint: left panel} Mswer: P' = $ ' Q" = What is the rm's profit-maximizing output quantity, q\"? (Hint: right panel} Answer: q\" = Given q', what is rm's total cost per unit of output? Mover: S Given q', what is the firm's prot per unit of output? Answer: $ [Include a minus sign as needed.) What is the rm's total prot? Answer: 5 [Include a minus sign as needed.) Given your answer in (5], will there be entryr or exit? Answer: (11-2: ATC Representative Firm Quantity, q (In thousands} M Units K Units Price Industry Individual Firm ATC MC S $16 $16 $15 $15 $14 -$14 $10 $10 D1 4M 6M 10M 1K 1.3K 5M 0.9K Market Quantity, Q (in millions) Representative Firm Quantity, q (in thousands) (7) Given your answer in (6), what will happen to the industry supply curve, S1, in the left panel? (Shifting to the right, to the left or staying constant?) Answer: (8) Entry or exit will continue until the representative firm's economic profit is driven down or driven up, respectively, to zero. From the right panel, at what price would the profit-maximizing firm's economic profit be zero? Answer: $_ (9) (i) Draw the new industry supply curve on the left diagram that would result in the equilibrium price you identified in (8) and label it as S2. (ii) What is the industry's new equilibrium price? (iii) What is the industry's new equilibrium quantity? Answer: pnew = $ _ Qnew = M Units (10) Given your answer in (9), what is the firm's new profit-maximizing output quantity, qnew? (Hint: right panel) Answer: qnew = K Units (11) Given qnew, what is firm's profit per unit of output? Answer: $ (12) Has long-run equilibrium been reached? Yes or no? Answer: (13) Originally, the industry output was Q = _M and the representative firm's output was q = K. Now, the industry output reduces to Q = M and the representative firm's output increases to q = K. (14) Thus, the industry has contracted (i.e., producing less), but individual firms have expanded (i.e., producing more). This seemingly inconsistent result can be explained by noting that, because of the ( entry , exit ), there are now ( more , fewer ) firms producing in the industry