Question: Figure shows the short-run and long-run adjustment process for a decreasing cost industry responding to an increase in demand. Draw a similar two-panel diagram, illustrating

Figure shows the short-run and long-run adjustment process for a decreasing cost industry responding to an increase in demand. Draw a similar two-panel diagram, illustrating the response of a decreasing cost industry to a decrease in demand. Draw in the long run supply curve. In the long run, will the price be higher or lower, compared to the initialprice?

Europe U.S Dollars Dollars per Dose per Dose 2.25- $2.25-- MC MC $0.50 $0.50 Deurope MR Dus MR Millions 0 Doses per Year 70 70 Millions Doses per Year

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