The market for a particular good is perfectly competitive, and the current market price is $60. A typical firm has $600 in fixed

costs and has a short run marginal cost of production of MC = 5q, where q is the number of units of output produced by the firm.

1.) If it is optimal for the firm to produce a positive amount of output in the short run, how much should it produce?

2.) Suppose that the firm's variable cost when producing the amount of output found in part (a) is $480. What is the firm's profit if it produces this amount of output? In the short run, should the firm produce this amount or shut down (produce q = 0)?

3.) If the firm's cost of producing this level of output remains the same in the long run, and the market demand curve does not change over time, will firms enter or exit this market in the long run?