Question: 3. In a perfectly competitive market, consider a single rm producing baguettes in the short run. a. Illustrate a situation, using the rm's costs curves

3. In a perfectly competitive market, consider a single rm producing

3. In a perfectly competitive market, consider a single rm producing baguettes in the short run. a. Illustrate a situation, using the rm's costs curves (AVC, ATC, and MC) and a market price P* for baguettes that shows a rm making positive prot. Label the quantity of baguettes the firm produces q* and shade in the area of prot the rm earns. b. Now suppose the wage of baguette workers rises. Show in your graph (and explain!) what happens to prot and the prot maximizing quantity of baguettes the fmn produces. Label the new quantity of baguettes the rm produces q' and shade in the new area of prot the rm earns

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