Sleek sneakers is one of many firms in the market for shoes. a. Assume that sleek is currently earning short run economic profit. On a correctly labeled diagram, show Sleek's profit maximizing output and price as well as the area representing the profit. b. What happen to Sleek's price, output and profit in the long run? Explain this change in words and show it on a new diagram. c. Suppose that overtime consumers become more focused on stylistic differences among shoe brands. How would this change in attitudes affect each firm's price elasticity of demand? In the long run, how will this change in demand affect Sleek's price, output and profit? d. At the profit maximizing price you identified in part (c), is Sleek's demand curve elastic or inelastic? Explain.
Sleek sneakers is one of many firms in the market for shoes.
a. Assume that sleek is currently earning short run economic profit. On a correctly labeled diagram, show Sleek's profit maximizing output and
b. What happen to Sleek's price, output and profit in the long run? Explain this change in words and show it on a new diagram.
c. Suppose that overtime consumers become more focused on stylistic differences among shoe brands. How would this change in attitudes affect each firm's
d. At the profit maximizing price you identified in part (c), is Sleek's demand curve elastic or inelastic? Explain.
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