Problem 3 Company C is a competitive rm in the pen producing market. They produce pens (q) using labour (L) and materials (K). Their cost functiou is C(q) = 200 + 20:; + 2:12. (a) What are Company C's marginal cost and average variable cost functions? (b) If Company C is currently producing 20 pens, what will be the additional cost of producing one more pen? (Assume the increase in output is small]. (c) What is Companyr C's profit-maximizing decision if the market price is p? (d) Assume in the short run, the market price is 2 and there are 15 firms in the market. What is the quantity of pens supplied by Company C? What is the market quantity of pens supplied? (e) What is the long run equilibrium price in the pen market? What is the long run equilibrium quantity sold per firm? (f) In the long run, there is an unlimited number of potential rms in the pen market. The market demand for pens is Q=30-p. What is the number of firms in the market in the long run