Change the answer given in the Challenge Solution for the short run rather than for the long run.$$

$($Hint$$:

The answer depends on where the demand curve intersects the original$$ short$-$run supply$$ curve.$)$

Part $2$

The Federal Motor Carrier Safety Administration$($FMCSA$)$ along with state transportation agencies in $38$ states administer interstate trucking licenses through a Single State Registration System. $$ However, the registration process is$$ complex, time$$ consuming, and expensive. There are many fees and costly regulations that a trucker or firm must meet to operate. For$$ example, for a large$$ truck, the annual federal interstate registration fee can exceed$$ $$8,000.$ These largely$$ lump$-$sum

costslong dash$$which

are not related to the number of miles

drivenlong dash$$have

increased substantially in recent years.

Part $3$

What effect do these new fixed costs have on the trucking market price and$$ quantity? Are individual firms providing more or fewer trucking$$ services? Does the number of firms in the market rise or$$ fall?

Part $4$

Assume truckers are in a perfectly competitive market that is initially in$$ long$-$run

equilibrium

LOADING...

$.$

Part $5$

In the short$$ run, the market price will

increase

$,$

the market quantity will

decrease

$,$

each individual$$ trucker's output will

not change

$,$

and the number of truckers will

decrease

as a result of the various$$ lump$-$sum operation fees.