Question: B (50 marks) The diagram below represents the LONG run equilibrium of a firm in perfect competition. P MC AC D-AR-MR Q (a) Copy the

B (50 marks) The diagram below represents the LONG run equilibrium

B (50 marks) The diagram below represents the LONG run equilibrium of a firm in perfect competition. P MC AC D-AR-MR Q (a) Copy the diagram into your answer book. Write each of the six underlined labels in full. (15 marks) (b) Equilibrium occurs at point G on the diagram. Show on your diagram: (i) The price the firm will charge for its output (use label P). (ii) The output the firm will produce in equilibrium (use label Q1). (5 marks) (c) One of the characteristics of perfect competition is that PERFECT KNOWLEDGE exists. (i) Explain the underlined term. (ii) State two other characteristics of perfect competition. (iii) Write brief notes explaining each of these two characteristics

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