Given the short-run (SR) cost curve in the chart above for a firm in a perfectly competitive market, find the firm’s best output level and total profits when the market price is: a) $18, b) $13 c) $5 d) $3.
Assuming 100 identical firms in the industry (further assume that factor prices remain the same) what quantities will the industry and each firm supply when the product’s price is $9? What if prices are below $5?