Question 3: In the market for female shoes, all the firms face a similar demand curve and have similar cost curves to those of "Famous Footwear" in question 2 above.

1. What happens to the number of firms producing female shoes in the long run?
2. What happens to the price of female shoes in the long run?
3. What happens to the quantity of female shoes produced by "Famous Footwear" in the long run?
4. What happens to the quantity of female shoes in the entire market in the long run?
5. Does Famous Shoes have excess capacity in the long run?
6. Why, if Famous Shoes has excess capacity in the long run, doesn't the firm decrease its capacity?

g. What is the relationship between Famous Shoes' price and marginal cost?