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Assume a market at equilibrium shown by the intersection of S1 and…Assume a market at equilibrium shown by the intersection of S1 and D1 at a price of P1 = and at a market quantity of Q1 = 20,000. Assume also that there are 50 firms operating initially in this market. Assume that the diagram of the competitive firm above is representative of each individual firm in this market (each firm has a total fixed cost of \$100) a) Assume that there is now an increase in demand from D1 to D2 and a new equilibrium occurs at D2 and S1 and a new equilibrium price of P2 = .00 and at a market quantity of Q2 = 24,000: (assume that AVC for each firm is now \$3.00) show calculations:   –  MR and AR are equal to-  The quantity produced by each firm is- Total revenue received by each firm is________ –  Average total cost for each firm is-  Total cost of production for each firm is________ – Average fixed cost for each firm is_____________-  Average variable cost for each firm is___________-  Economic profit for each firm is ________________ b) Assume that additional firms enter and there is now an increase in supply from S1 to S2 and a new equilibrium occurs at D2 and S2 with a new market quantity of Q3 = 28,000: –  MR and AR are equal to – The quantity produced by each firm is- Total revenue received by each firm is- Average total cost for each firm is-Total cost of production for each firm is- Average fixed cost for each firm is- Average variable cost for each firm is-  Economic profit for each firm is Image transcription textMarket Competitive firm Price \$ Price, cost \$ S1 MC S2 ATC AVC P2 P2 P1 D1=AR1=MR1 P1 D2 D1 0 0 Q1 Q2Q3 91 92 Quantity quantity… Show more  Business Economics MicroeconomicsECF 1100

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