Suppose the daily demand function for pizza in St. Catharines is Q d
=1525−5P. For one pizza store, the variable cost of making q pizzas per dåy is C(q)=3q+0.01q 2
, there is a $100 fixed cost, and the marginal cost is MC=3+0.02q. There is free entry in the long run. (a) What is the long-run market equilibrium in this market? Assuime in the short run, the number of firms is fixed. Also assume there issfree entry in the long rwin. Consider the following scenarios: (b) The market demand increases to Q d
=2125−5P. (c) Therfixed costs decrease to $81. (d) The marginal costs rise by $5 per pizza. (e) The marginal costs decrease by $1 per pizza and the fixed costs decrease to 81 at the samê time. For each scenario, calculate i) the new short-run market equilibrium, ii) the profit of the firms, iii) the new loñg-run market equilibrium (i.e., the equilibrium price and quantity, and the number of firms in the equilibrium), and iv ) show the short-run and long-run equilibrium on a graph :