1. Assume the competitive market shown below faces a short run price of $10. Using the graph below,…

1. Assume the competitive market shown below faces a short run price of $10. Using the graph below, identify the following: Profit maximizing output: _______________________ Approximate mark up over cost _______________________ In the long run, the price falls to $7.50. Why does this happen? What is the new profit maximizing output? _______________________

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