Question 2 The market for study desks is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. All firms are identical in terms of their technological capabilities. Thus the cost function as given below for a representative firm can be assumed to be the cost function faced by each firm in the industry. The total cost and marginal cost functions for the representative firm are given by the following equations: TC = 2q; + 59: + 50 MC = 4q; + 5 Suppose that the market demand is given by: PD = 1025 - 2QD Note: Q represents market values and q represents firm values. The two are different. a) Determine the equation for average total cost for the firm. b) What is the long-run equilibrium price in this market? (Hint: since the market supply is unknown at this point, it's better not to think of trying to solve this problem using demand and supply equations. Instead you should think about this problem from the perspective for a firm. Specifically, a long run equilibrium occurs where ATC = MC = Price) c) What is the long-run output of each representative firm in this industry