Question: Assume that a perfectly competitive industry is in a short-run equilibrium as in graph a. And a perfectly competitive firm's cost curve is shown

Assume that a perfectly competitive industry is in a short-run equilibrium as in graph a. And a perfectly competitive firm's cost curve is shown in graph b. a) Industry price b) Firm using the above diagrams explain how perfectly competitive firm sets its price and quantity. What is the level of profit/loss of the firm? What happens in the industry in the long run? (4 marks) (70-100 words)

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