Question #1 - (6 Marks) - Use the perfect competition diagrams below to answer the following questions Firm A Firm B Firm C MC MC MC ATC ATC Price Price Price ATC p * p * p * Output Output Output QA QB QC a) Identify whether each firm is making profit, breaking even, or taking loses (3 Marks) b) Assuming all firms are in the same industry - is this industry at long term equilibrium? Why or why not. (2 Marks) c) When analyzing firms in a perfectly competitive market which cost curve will determine whether a firm will shut down? (1 Marks)Question #3 {11 Marks) Use the diagrams below to answer the following questions. The diagrams below show the Cartel at the industry level and at the firm level. Firm Cartel ATCf E MR 5 . . 5300 5600 Quantity Quantity E4 a) What is the firm's equilibrium and profit/Loss at the competitive market equilibrium? (3 Marks) b) What is the Cartel equilibrium? (2 Marks) c) If the firm has agreed to the Cartel, and is limited to producing only 2 units as part of the industry Cartel equilibirum: what is the firm's total cost, total revenue, and profit? (3 Marks) d) If the firm has entered the Cartel, but decides to maximize it's own profit by cheating the Cartel, what would be the firm's total cost, total revenue, and total profit