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1) On graph paper set up starting graphs for a competitive market and competitive firm in...

1) On graph paper set up starting graphs for a competitive market and competitive firm in which the competitive firm is making normal profits. include an average variable cost curve in the competitive firm's graph.

a. What happens in the market graph if the price of a substitute good increases?

b. How does the change in the market affect the firm's level of production and profits?

c. What is likely to happen in the competitive market after the little firms adjust their outputs, ceteris paribus (after the changes in the firm's graph)? Why is this likely to occur

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