1. The following graph shows a firm operating in a monopolistically competitive market. Short term, how many haircuts will the firm perform and at what price? At this point, what will its total revenue, total cost, and total profit be? Given your answers, what would we expect to happen in the long term in this market (i.e. are we at long term equilibrium, or will we see further changes)?

1. Is it possible for marginal revenue to be negative for a firm selling in a perfectly competitive market? Is it possible for marginal revenue to be negative for a firm selling in a monopolistically competitive market? Briefly explain.

1. Central Grocery in New Orleans is famous for its muffaletta, a large round sandwich filled with deli meats and topped with a tangy olive salad. Suppose the following table represents cost and revenue data for Central Grocery.

Muffaletta Sold per Day	Price (P)	Total Revenue (TR)	Marginal Revenue (MR)	Total Cost (TC)	Marginal Cost (MC)	Average Total Cost (ATC)	Profit
0	$15			$12
1	14			18
2	13			20
3	12			21
4	11			23
5	10			26
6	9			30
7	8			35
8	7			42
9	6			52
10	5			78

Fill in the table. What is the profit-maximizing price and quantity, and what profit will be earned at that level of production?