The following questions all pertain to an individual firm's cost curves and production decisions. a. Draw the typical short-run cost curves for a firm, as studied in class. Identify and label the following items on the graph for the case of a perfectly competitive firm: i. The shut-down point ii. The break-even point iii. The individual firm's short-run supply curve b. Suppose the market in which this firm operates is a constant-cost industry that was initially in a long-run equilibrium. i. On the graph, specify the market price (call it PLR) that would be consistent with a long-run scenario. (Assume mininum short-run ATC in your diagram = minimum long-run AC.) ii. Given PLR, label the firm's optimal output (call it QLR). iii. Do you have enough information to calculate the individual firm's profits in the long-run? If so, state the amount; if not, state what additional information you would need. c. Now suppose there was an increase in the popularity of the good sold in this market. i. What impact would this have on the market price in the short-run? Label a price on the graph that is consistent with this scenario (call it PSR). ii. Given this price, label the firm's profit maximizing output (call it QSR). iii. Outline in bold the firm's total revenue associated with QSR on the graph above. iv. Shade and label the firm's total costs associated with QSR on the graph above. v. Shade and label the firm's total profit associated with QSR on the graph above. d. Keeping in mind that this is a constant cost industry: i. Describe what we will observe in this industry as it moves back toward another long-run equilibrium. ii. Draw a diagram of the market both before and after the increase in demand. Label the prices in the market in a manner consistent with the information in parts b and c. To the right of the market graph, draw a graph with the representative firm's short-run cost curves. You should line up the individual firm's cost curves with both PLR and PSR in a manner consistent with the information in b. and c. Label fully. iii. Illustrate what will happen to the market supply curve in the long run after the increase in demand, and label the final resulting price on both diagrams. iv. On the diagram of the market, draw and label the long-run industry supply curve