You are a manager in a perfectly competitive market. The market equilibrium price for the good you produce is $35. Your total cost is = 80 + 5 + 30 2 and marginal cost is = 5 + 60. a. What level of output should you produce in the short run? b. What is your profit in the short run? c. What will happen in the long run? 3. A local tomato farm, firm i, operates in a perfectly competitive market and has total costs of production given by = 500 + 10 + 5 2 and marginal cost given by = 10 + 10 . The market demand for tomatoes is given by = 105 0.5. The market demand represents quantity demanded across all buyers. Notice the use of subscript i to distinguish the output of firm i () from and the output of other tomato farms operating in this perfectly competitive market. At market equilibrium, = = a. Write the equations showing the farm’s average total cost, average variable cost, and average fixed cost, each as a function of quantity ( ). b. What is the break-even price and break-even quantity for this firm in the short run? c. What is the shut-down price and shut-down quantity for this firm in the short run? d. If the market price of the product is $50, how many units will this firm produce? e. Given a market price of $50, how many firms are in this market? 4. A monopoly firm faces the following market demand = 100 . The firms total cost curve is = 10 + 5 and marginal cost is = 5. a. What is the profit maximizing price and quantity for this firm? Calculate profit. b. How does your answer change if the firm has to pay a lump-sum tax of $500? NOTE: A lumpsum tax is like an additional fixed cost. We can express total cost as = 10 + + 5. c. For what lump-sum tax value does the monopolist shut down in the long run?