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Consider a perfectly competitive industry at a long-run equilibrium. a. Suppose there is a sudden change...

Consider a perfectly competitive industry at a long-run equilibrium. a. Suppose there is a sudden change in consumer preferences which increases the demand for the firm’s product. What are the effects of the change on the equilibrium of an individual firm in the short and the long run? Draw the graphs. Explain. b. Suppose there is an adverse technological shock that increases the cost of production of the firms in the industry. What are the effects of the change on the equilibrium of an individual firm in the short and the long run? Draw the graphs. Explain.

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Rahul Sunny answered 2 years ago
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