Suppose that the potato growing industry in PEI is perfectly competitive. Each firm that enters this

industry has a long-run total cost curve ofTC(q)=60q2q²+0.02q³. The market demand curve isQ^mkt=15202P.

1.Listthefourcharacteristicsofaperfectlycompetitiveindustry.Besidethese,indicatethecorresponding three implicationsforhow these marketswork.

2.What three conditions must hold in the long-run equilibrium? Include a brief explanationinwordsforeach of the three conditions.

3.Findthelong-runequilibrium,whichshouldincludetheequilibriummarketpriceP,theequilibriumquantityproducedbyallfirmsQ^mktandthenumberoffirmsthatexistn.