Using the graph answer the following questions:A: At the profit maximizing level of output, what is the firm's total revenue?B: At the profit maximizing quantity, what is the firm's total cost? C: At the profit maximizing quantity, what is the firm's profit?D: Assuming that most firms in the industry have similar costs, describe what happens in this market to bring the industry to a long-run equilibrium (where there are zero profits). The graph illustrates the relationship between Marginal Cost (MC), Average Cost (AC), and Marginal Revenue (MR) over a quantity range from 1 to 10.### Key Features:1. **Axes:** - The x-axis represents quantity, ranging from 1 to 10. - The y-axis represents cost/revenue values, ranging from 1 to 5.2. **Curves:** - **MC (Marginal Cost):** The curve is upward sloping, reflecting an increase in marginal costs as production increases. - **AC (Average Cost):** The AC curve is U-shaped, indicating that average costs decrease initially, reach a minimum, and then increase. - **MR (Marginal Revenue):** This is a horizontal line at the level of 5, indicating constant marginal revenue across all levels of output.3. **Interactions:** - The MC intersects the AC curve at its lowest point, which is the breakeven quantity where average costs are minimized. - The horizontal MR line indicates a perfectly competitive market scenario where the firm is a price taker. This graph is often used in economics to demonstrate cost structures and profit maximization in competitive markets. The point of equilibrium, where MR equals MC, is crucial for determining the optimal output level.

Perfect competition is a type of market where there are very large number of firms,which have no market power at all. All perfect competition firms are price takers.It means they take equilibrium price as given and sell at equilibrium price as much they want.Because price is given ,so each additional unit will give same revenue equal to price, so marginal revenue is equal to price.So , Using profit maximizing condition;perfect competition firm's profit maximizing quantity at where price=Marginal cost (P=MC)Profit maximizing output is where marginal revenue is equal to marginal cost.Based on given graph, we can conclude that profit maximizing output is 6, where MR curve intersects MC curve.Because MR curve is horizontal, it means marginal revenue is constant.So Price will also be equal to marginal revenue.Price=MR=$5 Total revenue= Price*OutputTotal revenue=5*6=$30Total cost = Average total cost* outputAt profit maximizing output, ATC=$4 Total cost=4*6=$24 Profit= Total revenue - Total costProfit=30 - 24 =$6Short run economic profit= $6 In short run all firms are earning positive economic profit, it will attract new firms.So, In long run new firms will enter the market, which will increase market supply.An increase in market supply will decrease market equilibrium price. A decrease in price will decrease firm's profit and this process will continue till all existing firms earn zero economic profit.A) Total revenue= $30B) Total cost= $24 C) Profit= $6D) New firms will enter, market price will fall and all existing firms will earn zero economic profit.