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Unformatted text preview: How much coffee does each firm produce? How many firms are in the industry? Let N^=the number of firms that are in the industry in long-run equilibrium. 3) Show graphically the short-run price and quantity for the individual firm and the entire industry. Show graphically how individual firms and the industry adjust in the long run. 4) Because the coffee industry provides employment for many workers in Optimality, the government wants to keep exactly 100 firms in the industry, how much coffee must it buy to keep all of the initial 100 firms in the industry in the long run? What will be the total cost of the program? (Hint: under what circumstances will exactly 100 firms voluntarily choose to be in the industry in the long run?)...
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This note was uploaded on 03/26/2008 for the course EC 16 taught by Professor Loury during the Fall '07 term at Tufts.
- Fall '07