the question in the pictures

SECTION 2: QUANTITATIVE ANALYSIS (35 MARKS) Question 1: Perfect Competition (15 Marks) Consider the graphs below, which depict a firm in a perfectly competitive market in long run equilibrium. Answer the questions that follow. Firm Market Supply 160 160 140 140 ATC 120 MC 100 Price Price L 80 60 40 20 20 Dermand 200 400 600 800 1000 1200 1400 1600 Quantity Quantity 2 6 10 12 14 16 a) What is the market equilibrium price and quantity? (2 marks) b) What is the optimal quantity that the firm should produce? (1 mark) c) What type of profit will this firm make and how many firms are there in this market? (2 marks) d) Assume there is an increase in market demand of 600 units at each price. Add this to the above diagram and state the new equilibrium price. (To add a new demand curve, click on the above graph and then click on the 'Insert' tab. Select 'Shapes' and then click on 'Lines'. Click on where the demand curve will be according to the new quantity) (2 marks)e) What is the new optimal quantity that the firm should produce? (1 mark) f) What is the firm's new profit? (1 mark) g) Free entry will allow new firms to enter the market, returning the market to a long run equilibrium. Add this to the above diagram. (To add a new supply curve, click on the above graph and then click on the 'Insert' tab. Select 'Shapes' and then click on 'Lines'. Click on where the supply curve will be according to your knowledge on long run equilibrium) (1 mark) h) What is the final market equilibrium price and quantity? (2 marks) i) What is the optimal quantity that the firm should produce and what profit will they now make? (2 marks) j) How many firms are now in the market? (1 mark)