Suppose the headphone industry is perfectly competitive and every firm has the following cost structure:

• MC= 50 + 6q
• ATC = 50 + 3q + 675/q
• AFC = 675/q

whereqis the number of headphones produced by a typical firm in a year. The current market price is $74 per headphone.

Answer the following questions (4points each):

• What is the profit-maximizing quantity sold at the current market price by each firm?
• What is the long-run market price of headphones?
• In the long run, what is the theprofit-maximizingquantityof headphones sold?