Hi-Tech's profits increase.
The price of books decreases.
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The new process reduces Hi-Tech's marginal cost and average total cost, causing both curves to shift
downward. However, the price remains the same because other firms cannot use the new process, so
Hi-Tech earns positive profits. See Section: Measuring Profit in Our Graph for the Competitive Firm.
Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech
Printing Company invents a new process that sharply reduces the cost of printing books.
The following graph shows Hi-Tech's initial marginal-cost curve (
MC1) and average-total-cost
ATC1) before the new technology, and its marginal-cost curve (
MC2) and average-
total-cost curve (
ATC2) after the new technology.