Answer the Following Questions

Essay

Answer the following questions.
a. In a perfectly competitive industry, the industry demand and supply curves are given by Q^D = 2,500 - 50P and Q^S = 20P - 300. Given the market conditions, graph the competitive firm's demand and marginal revenue curves.
b. Graph a competitive firm that is earning economic profit. In your graph, indicate the level of profit by shading in the appropriate area.
c. A perfectly competitive firm is selling 2,000 units at a price of $3, with average total cost equal to $1.85. Calculate the firm's profit.