FRQ: Rice is produced in a perfectly competitive industry. Grand Farm is a typical firm in the rice industry earning a positive economic profit. (a) Using correctly labeled side-by-side graphs for the rice industry and Grand Farm,
show each of the following in the short run.

(i) The industry price and quantity, labeled Pm and Qm

(ii) Grand Farm's demand curve and marginal revenue curve, labeled Df and MRf

(iii) Grand Farm's quantity of output, labeled Qf

(iv) Grand Farm's profit, shaded completely

(b) In the long run, what happens to each of the following?

(1) The number of firms in the industry. Explain.

(ii) The equilibrium price does it increase, decrease, or remain the same relative
to Pm?

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