SHA 52 MC ATC 53 h W 10 20 30 40 50 60 70 80 90 100 10 20 30 40 50 60 70 80 90 100 Quantity Quantity Wee the graph above showing a market and a representative firm operating in a perfectly competitive environment to answer the following questions. 2) (1 Point) Identify the long-run equilibrium price and the quantity produced by each firm in this market. b) (4 Points) Assume there is a disaster that reduces the number of firms in the market such that the market supply curve shifts from $1 to $2. Anewer the following questions: a. What is the new, short-run market price and quantity produced by each firm? b. Is there a positive, negative, or zero economic profit? c. Calculate the exact economic profit earned by each firm (each small line between the whole number prices is equal to $0.20). d. What will happen in the long run to this market? () (+ Point) If the supply curve shifted to $3, briefly explain what would we expect to see in the short run and how would that change in the long run? d) (1 Points) For any given market, what determines the length of the "short run"? (4 Points) List the four assumptions for perfectly competitive markets. (3 Points) Fill in the three missing values in the table below. Quantity Fixed Cost Variable Cost Total Cost Marginal Cost Average Cost 0 2.00 S S 2.00 5 2.00 1.50 3.50 1.50 3.50 2.00 4.00 2.50 3.00 2.00 7.00 9.00 3100 (c) 2.00 11.50 13.50 3.38 2.00 1800 5 20.00 5 6.50 4.00g) (+ Points) Based on the table used in question (f), what market price will result in a long run equilibrium in this market? Why? h) (+ Points) Using the table used in question (f), calculate the economic profits or losses that would occur to this firm if the marginal revenue was $6.50 and then comment on what we would expect to see happen in the long run in this market. BONUS QUESTIONS (1 Point Each) Bl) Briefly explain the elimination principle B2) Briefly explain the difference between economic and accounting profit. B3) To proxy for opportunity cost economists will typically use the interest rate on a 10-year T-Bill What is the current rate for this product and what would be the opportunity cost of $1 Million