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Q. Does quantity provided by each individual shoemaker change by more in short run or in long run? Justify (illustrate) your answer.
Do profits of shoemakers change by more in short run or in long run? Justify (illustrate) your answer 3. Every firm in widget industry has fixed costs of $6 and faces following marginal cost curve: Quantity Marginal Cost ($) 1 2 2 4 3 6 4 8 5 10
A. Suppose price of widgets is $10. How many widgets does each firm produce? How much profit does each firm earn? Is industry in long-run equilibrium? How do you know?
B. In long run, will re be entry or exit from this industry? What will be price of widgets in long run? How many widgets will each firm produce?
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