1. Suppose firms operating in the monopolistically competitive snack food market adopt a new food processing technology that decreases average total cost at the firms, while marginal cost remains unchanged.

a. Draw a market graph to show what will happen to the number of firms operating in the market.

b. What happened to market quantity?

c. What happened to market price?

d. Draw a firm graph to show what will happen to the price and quantity produced at a representative firm.