Suppose Sophia sells flowers in a perfectly competitive market and always maximizes profit. (a) Given the current market price is $5, Sophia sells 2000 flowers every week and makes zero profit. What are the amounts of marginal revenue, marginal cost and average total cost at this level of output? Briefly explain.  (b) Continued from (a), if the market demand decreases, what will be the short-run impact on Sophia’s profit? Explain in detail with diagrams.

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