Question: 2. Ada's Flower Store is a small business that operates in a market that is perfectly competitive in the longer run (but may need some

2. Ada's Flower Store is a small business that operates in a market that is perfectly competitive in the longer run (but may need some time to adjust). The short-run TC of production is SRTC(() =40+50+0.10 a) The prevailing market price for a "standard" bunch of flowers is $10. How many bunches of flowers should Ada produce to maximize profit? ASRTC MC = = 5+0.20 =10 -P => Q-25 b) What is Ada's profit (if any) in a)? 1=TR-TC=100-40-50-0.107 -250-40-125-62.5 = 22.5 c) Graph Ada's TR. TC, and profit function into one graph assuming that the price currently is $10. Make sure key points are clearly identified. Show were the profit is maximized and graphically explain why that is the point. d) Graph her SRMC and SRAC and match that graph up to c) - ideally you draw it right underneath and connect relevant points; show her profit-maximizing quantity, and clearly identify the profit she makes in the graph

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