On January 28, 2017, an empty LPG tanker leaving the Kamarajar Port in the State of Tamil

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On January 28, 2017, an empty LPG tanker leaving the Kamarajar Port in the State of Tamil Nadu, India, collided with an inbound tanker carrying 45,000 metric tons of oil, causing a spill of between 20 and 60 metric tons. A physical barrier to keep the oil contained was not effective, and the spill spread about 34 kilometers to the south, affecting marine life and beaches in the area. Over 1,000 personnel from several government agencies and many volunteers helped in the cleanup efforts. Use diagrams of a competitive market for cleanup services and of a representative firm providing those services to show the effects of an increase in demand on price, output, profit, and the number of firms in both the short and long run, assuming a horizontal long-run supply curve. Explain how your answer depends on whether the shift in demand is of a short or long duration.

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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