Assume that the following conditions exist for a perfectly competitive firm: price = $8.50, current output = 100 units, atc at current output = $9.00, avc at current output = $8.00, total fixed costs =$100 and mc at current output = $8.00. a. is the firm earning any economic profit currently? how much is its profit or loss? b. is the firm maximizing its economic profit? what should the firm do to maximize profit or minimize loss? c. given your answers in part b, how will the market adjust to reach long-run equilibrium? include appropriate graphs in your explanation.

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.