Answer
a) Please see the first graph.
b) Please see the second graph.
c) Please see the second graph.
Work Step by Step
a) The graph has the marginal cost and average total cost curves noted, with the marginal revenue equal to the price $P_{0}$ (and the equilibrium quantity of $Q_{0}$.
b) Since Hi-Tech has the new process, Hi-Tech is the only firm with the new process. The patent keeps the market price at $P_{0}$. In turn, Hi-Tech makes a profit (since the firm has lower costs and produces $Q_{1}$ units).
c) In the long run, when the patent expires, the price falls to $P_{1}$, and the quantity produced moves to $Q_{2}$. Due to falling prices, firms in the industry do not make a profit.
