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2/11 - our graphs It is always easier to walk away from one...

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2/11/08 Elasticity Suppose the Akron tire company invents a new machine for making tires and applies for a patent. Compare the effect if the patent is approved vs. if it is denied. Answer: We see compare so we can draw 2 panels. Then, we understand it is a breadth of the market problem b/c it is Akron tires vs. all tires, so then we can title
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Unformatted text preview: our graphs. It is always easier to walk away from one brand, so the market for Akron tires is elastic, therefore all tires are inelastic. A new machine will increase supply, so the supply curve shifts to the left. Since only one curve can be different, we know the supply curve must be shifted the same amount....
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