This is still part i use bluebook i explain your

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THIS IS STILL PART I: USE BLUEBOOK I. Explain your answers carefully using graphs where appropriate. Your grade depends on your explanation as well as your answer: so show your work and draw clear graphs. Q1. (30 points) Please write your answer in bluebook #1. Consider the market for taxis in Philadelphia. For start, assume that n companies provide rides in the city and the market for rides is perfectly competitive and in a long run equilibrium. Each firm faces the following cost curves: FC = 16 MC = 2q AVC = q a. Find the equilibrium price and quantity P* and q* for each firm b. Is the outcome efficient? Why? c. Uber enters the market for rides in Philadelphia. Assuming Uber is a substitute for taxis, how does this development impact demand for taxis? Explain graphically. d. In the short run market for taxis, how do q, P, and profit change for each taxi firm? Note any changes and explain graphically. If one is unaffected by Uber, just note that it does not change. e. Will taxi firms enter or exit the market, or will the same number of taxi firms remain in the long run?
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