Question 2 (15 points) A perfectly competitive industry has a large number of potential entrants. Each firm has the same production function q=k1/4l1/2, where k is the amount of capital, and l is the number of labor hours. Let the rental rate be equal to 0.5, and the hourly wage be equal to 1 . Assume that each firm also suffers a fixed cost of marketing, which equals 8 . (a) Carefully write down the cost minimization problem of a firm and find the total cost of producing q>0 units of output. (b) Let p>0 denote the price of the firm's output. Find the long-run supply of a firm, the equilibrium price of output and the output produced by each firm. How much of capital and labor will each firm use in the long run equilibrium? (c) Let the market demand be given by the function Qd(p)=1,80050p. Find the number of firms that produce in the long run equilibrium. (d) Suppose that the market demand becomes Qd(p)=1,68050p. What is the market clearing price in the very short run when the firms cannot change their output quantities? Which profits will the firms make? (e) What is the short run supply of each firm and the industry supply? Recall that in the short run, the capital stock is fixed, but labor is flexible. (f) What is the equilibrium in the short run? How many units of output will each firm produce? Which profits will the firms make? (g) What is the new long-run equilibrium for the industry