a. Compute the profits of an individual firm in this market thatoptimally produces a quantity of 120 units and faces average totalcosts of $6 and average variable costs of $3.
b. What do we expect to happen in this market in long run?
Hint: Draw two graphs side-by-side: On the left side,sketch a representation of the market equilibrium (i.e. supply,demand, market equilibrium quantity and market equilibrium price).On the right side, sketch a representation of the individualcompetitive firm's cost curves (I haven't provided much informationabout the actual shape, but draw something consistent with thegiven data). Make sure the market equilibrium price determined inyour leftmost graph appears in your rightmost graph: Eachindividual firm takes the market price as given!
a. Compute the profits of an individual firm in this market that optimally produces a quantity of 120 units and faces av
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answerhappygod
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