PROBLEM #4 The graph below shows the short-run cost curves for a firm operating in a perfectly competitive market. Suppose that, based on the market supply and demand, the equilibrium price in this market is $10, such that the marginal revenue is as shown below. a. Briefly explain why this firm will operate in the short run. b. What quantity will the firm choose to produce? c. Shade the region on the graph that represents the firm's profits. Are these positive or negative profits? d. Do you expect to see entry or exit in this market? e. Once this process of entry or exit is complete, what will the final equilibrium market price be? MC ATC Price (dolalrs per unit 10 MR .. .... ay 4 ........ T........ 15 O 10 20 Quantity (units)