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Unformatted text preview: Examples: oil, coal, agricultural products The long-run supply curve is upward sloping. X. More on Zero Economic Profits In the increasing cost industry, where did the profits go when demand rose and price increased? Don't the firms using the mines with low cost coal earn economic profits? Example: Mine A: Mine B: Revenue $100,000 $100,000 Labor, machinery, management, opportunity cost of capital 80,000 60,000 Lease for mine 20,000 20,000 Economic Profits 0 20,000 Would you rather operate Mine A or Mine B? Bryan L. Boulier, 2011. All rights reserved....
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