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PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally, firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughout all these changes, the industry remains competitive. Graphically show how this new law changes the industry in both the short run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS, Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new law is put in place and in the long run. Correctly show how the market will adjust to the new long-run competitive equilibrium. Clearly show how the long-run equilibrium market quantity and market price

PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally, firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughout all these changes, the industry remains competitive. Graphically show how this new law changes the industry in both the short run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS, Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new law is put in place and in the long run. Correctly show how the market will adjust to the new long-run competitive equilibrium. Clearly show how the long-run equilibrium market quantity and market price

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter22: Perfect Competition
Section: Chapter Questions
Problem 13QP
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PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally, firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughout all these changes, the industry remains competitive. Graphically show how this new law changes the industry in both the short run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS, Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new law is put in place and in the long run. Correctly show how the market will adjust to the new long-run competitive equilibrium. Clearly show how the long-run equilibrium market quantity and market price
Transcribed Image Text:PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally, firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughout all these changes, the industry remains competitive. Graphically show how this new law changes the industry in both the short run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS, Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new law is put in place and in the long run. Correctly show how the market will adjust to the new long-run competitive equilibrium. Clearly show how the long-run equilibrium market quantity and market price
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