Consider the perfectly competitive market.
a. Draw a graph of a perfectly competitive market making a profit and a loss. Be sure to label each part of your graphs.
b. Let's assume that the market price is $20 and the Average Total Cost of the firm is $22. The firm is currently producing 200 units.
i. Is the firm making a profit or loss? What is the amount of the profit and loss?
c. Using two separate graphs, illustrate the short-run and long-run supply curves for the perfectly competitive market. Be sure to label every line in your graphs.