only part (e) and part (f)

Section C: Long Analytical Questions 1. (PERFECTLY COMPETITIVE MARKET) (25 marks) Suppose the marijuana growing industry in Canada is perfectly competitive and there is free entry in the long run. The market demand function is Qd = 400 - 4P, which is measured in tons per month. Each producer in the industry has cost function given by TC = q* +59 + 100, where q is the output of an individual producer. (a) (3 marks) Calculate the long-run market equilibrium price and quantity. (b) (4 marks) How many firms are there in the long-run equilibrium? What is the short-run market supply function? (c) (4 marks) Suppose the demand function decreases to Qd = 305 -- 4P, what is the short-run equilibrium price and quantity? (a) (4 marks) Draw a graph to show the short-run and long-run response of the economy in (e) (5 marks) Ignore (c). Suppose the marginal cost increases by $1 from the long-run equilib- rium. At the same time the market demand decreases to Qd = 358 - 4P. Calculate the new short-run market equilibrium price and quantity. (f) (5 marks) Draw a graph to show the short-run and long-run response of the economy. Mark the short-run and long-run equilibrium price and quantity clearly on the graph