Question: This is a question about microeconomics Develop a general analysis of a perfectly competitive market in the following steps: a) Illustrate the optimization of a

This is a question about microeconomics Develop a general analysis of

This is a question about microeconomics

Develop a general analysis of a perfectly competitive market in the following steps: a) Illustrate the optimization of a firm with positive SR profit. Explain your diagram. What is the producer surplus in your diagram? Compare the profit and producer surplus levels. b) Based on your nding in Part a), how do you expect the industry which the firm is in to change? Draw 2 diagrams to describe the dynamics and outcomes happening in the firm and industry. Explain your diagrams. c) What economics term do we use to describe the ultimate outcome of these comparative equilibria? Which 3 features does this final equilibrium demonstrate

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