Suppose the market for tattoo shops in Reno is monopolistically competitive. Suppose that the wages of tattoo artists fall, shifting down the average cost curve for tattoo shops. Explain, either in words, using a graph, or both, why either of the following are possible: a. The prices charged by existing shops goes up in the long run. b. The prices charged by existing shops goes down in the long run.

Suppose the market for tattoo shops in Reno is monopolistically competitive. Suppose that the wages of tattoo artists fall, shifting down the average cost curve for tattoo shops. Explain, either in words, using a graph, or both, why either of the following are possible: a. The prices charged by existing shops goes up in the long run. b. The prices charged by existing shops goes down in the long run.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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