c. a company that invented a very comfortable razor or a company that invented a less comfortable razor I think that the company that invented the very comfortable razor would likely engage in advertising because they know their product works and would shell out the money in advertising to support the sales of their good. The company that invented the less comfortable razor would likely go back to the drawing board. 10. Sleek Sneakers Co. is one of many firms in the market for shoes. a. Assume that Sleek is currently earning short-run economic profit. On a correctly labeled diagram, show Sleek’s profit maximizing output and price as well as the area representing profit. The graph (below) shows Sleek’s demand, marginal-revenue, marginal-cost, and average-total- cost curves. The firm will maximize profit at an output level of Q * and a price of P *. The shaded are shows the firm’s profits. b. What happens to Sleek’s price, output, and profit in the long run? Explain this change in words, and show it on a new diagram. In the long run, firms will enter, shifting the demand for Sleek’s product to the left. Its price and output will fall. Firms will enter until profits are equal to zero (as shown in the graph below).