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Determining the technology improvement

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The market for solar panels is perfectly competitive and is initially in equilibrium. A professor invents a new process for making solar panels at a lower cost, and generously provides this new technology for free to any firms that want to use it. Assume that the solar panel industry is a constant-cost industry before and after the technology improvement. Explain how the change in technology affects the long-run price of solar panels.

Reference no: EM131951903

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