In the industry as point b the new industry level of

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in the industry as point B, the new industry level of output Q.*, the new per firm level of output q*, and the new equilibrium price P *. Use an arrow (numbered with a "1") to denote the direction of any curve shift(s) in the short-run. b) Once the market has settled into the new short-run equilibrium, compared to the initial long-run equilibrium: - the level of profit (per firm) has increased, decreased, or stays the same (pick ONE); and - the number of firms has increased, decreased, or stays the same - (pick ONE). On the two diagrams above (in your answer booklet) draw the new long-run equilibrium in the market and the new long-run
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equilibrium for the typical firm. Label any new curves with a subscript number 2 . Label the new Long-Run � � equilibrium position in the industry as point C, the new industry level of output Q2*, the new per firm level of output q2*, and the new equilibrium price P2*. Use an arrow (numbered with a "2") to denote any curve shift(s) in the longer term. Once the market has settled into the new long- run equilibrium, compared to the initial long- run equilibrium: - the level of profit (per firm) has increased, decreased, or stays the same (pick ONE), and the number of firms has increased, decreased, or stays the same - (pick ONE). SSR,0 MC AC O SLR,0 90*
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