The paper should be thoughtful and well organized. It should be no longer than one single-spaced page.Topic A: A perfectly competitive firm is currently maximizing profits. The market for its product is in a long-run equilibrium. Market demand for the product decreases. Briefly summarize what happens in the market. Describe what will happen to this firm’s production (and most importantly why) as a result of that change. Describe what will happen and why to the firm’s costs and profits as the firm makes its choices. Emphasize why each type of individual cost does or does not change as the firm changes its level of production. Explain your reasoning. Summarize what will happen in the market in the long run. Discuss the changes that will occur in the long run for the firm and explain why. You do not need to discuss why each cost changes, but do explain why the firm ends up where it does relative to where it was at the beginning and where it was in the short run. (You do not need to explain the logic of why the market price and quantity may or may not change, just summarize. Focus on the decision-making of a typical firm in the short run and in the long run
