4. [Firms and Industries Changing Over Time—Cost Curves] John is a graphic designer freelancer on an online platform. Su

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4. [Firms and Industries Changing Over Time—Cost Curves] John isa graphic designerfreelancer on an online platform. Suppose that this industry isperfectly competitive.a. John works from home and is currently making positive economicprofits given his equipmentcosts and utility bills. Draw a diagram that is consistent withthis short-run equilibrium. Yourdiagram should include two graphs: one showing the market demandand supply and a secondsketching cost curves for John’s services. Your graph should labelall axes, curves, the marketequilibrium price and quantity, John’s quantity, and John’sprofits.
b. What happens to the freelancing industry in the long run? Modifyyour diagram from part (a)to demonstrate how the market transitions from the short runequilibrium to the long runequilibrium. Additionally, explain in words how this transitionoccurs.