The firm operates on a perfectly competitive market. The graph shows its cost curves and the market price p*. a. What is the profit maximising output? Estimate the profit at the profit maximising output.
b. Is it long term or short term equilibrium? Please explain.
c. What is demand elasticity in this case?

Down under products, ltd., of australia has budgeted sales of its popular boomerang for the next four months as follows: unit salesapril 74,000may 85,000june 114,000july 92,000the company is now in the process of preparing a production budget for the second quarter. past experience has shown that end-of-month inventory levels must equal 10% of the following month’s unit sales. the inventory at the end of march was 7,400 units.required: prepare a production budget by month and in total, for the second quarter.