To advertise the health benefits of bicycling

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Suppose that bicycles are produced by a perfectly competitive, constant cost industry. Which of the following will have a larger effect on the long-run price of bicycles:

(1) a government program to advertise the health benefits of bicycling.

(2) a government program that increases the demand for steel, an input in the manufacture of bicycles that is produced in an increasing cost industry? Explain briefly.

Reference no: EM13200936

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