Lindsay owns PupUp, a small shop that sells gourmet dog treats from kiosks located in Cleveland-area shopping centers. She is considering expanding her business into Akron and Toledo. The graph below shows the average costs for each kiosk, along with a demand curve for each location.

a. Does the demand curve for the Cleveland kiosk indicate that Lindsay earns positive, negative, or zero economic profits? In the long run would you expect other businesses to enter the Cleveland market, exit the market, or neither? 

b. Does the demand curve for Akron indicate positive, negative, or zero economic profits? In the long run would you expect other businesses to enter the Akron market, exit, or neither? 

c. Does the demand curve in Toledo suggest positive, negative, or zero economic profits? In the long run would you expect other businesses to enter the Toledo market, exit, or neither?  

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Price $5 $4 $2 400 800 Average cost Cleveland's Demand Akron's Demand 1,200 Toledo's Demand 1,600 Quantity Stevenson/Wolfers, Principles of Economics, 1e, 2020 Worth Publishers