Question: Draw the short- and long-run cost curves for a competitive firm in long-run equilibrium. Indicate the long-run equilibrium price and quantity. a. Discuss the firms

Draw the short- and long-run cost curves for a competitive firm in long-run equilibrium. Indicate the long-run equilibrium price and quantity.
a. Discuss the firm’s short-run response to a reduction in the price of a variable resource.
b. Assuming that this is a constant-cost industry, describe the process by which the industry returns to long-run equilibrium following a change in market demand.

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