The diagram above represents the equilibrium position of a firm in a perfectly competitive industry. Study it carefully and answer the questions that follow.

(a) i. At what level of output and prices is the firm in equilibrium?

ii. Calculate the firm's profit in equilibrium

iii. What type of profits is it?

(b) i. Why is the average revenue (AR) function horizontal?

(c) State any two ways in which marginal cost (MC) and average total cost (ATC) are related.