Answer
a) Please see the first graph.
b) Domestic producers decrease production, and profits for domestic producers fall (and might turn into losses).
c) The number of domestic firms decreases (and might go to zero).
Work Step by Step
a) Since the market is competitive, the market is in the long-run. For a firm, their marginal cost is the same as their average total cost, and that cost is 30 dollars. Additionally, the firm will produce $Q_{0}$ units at 30 dollars.
b) Please see the second graph. Due to the lower price, the new quantity supplied domestically ($Q_{S}$) is less than the new quantity demanded domestically ($Q_{D}$). The difference between these quantities ($Q_{D}$-$Q_{S}$) is the quantity of the imports. Also, due to the lower price, domestic firms decrease their level of output from $Q_{0}$ to $Q_{1}$. Due to the lower price and lower levels of output, any profits firms had are decreased (and might turn into losses).
c) Due to large fixed costs, most (if not all) of the domestic firms will exit the industry, and other firms will enter the industry (to meet the entire domestic demand).
