Using a Supply and Demand and a Typical Firm Diagram

question 35

Essay

Using a supply and demand and a typical firm diagram, illustrate the impact of a flood on the market for contractors once the flood has receded. NOTE: Assume the market was perfectly competitive and in a long-run equilibrium position before the flood. Also assume that construction is a constant-cost industry.

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Definitions:

Upheaval Dome

A geological structure caused by the upward movement of underground salt creating a dome-shaped feature on the Earth’s surface.

Igneous Body

A mass of igneous rock formed from magma that has cooled and solidified either beneath the Earth's surface or upon it.

Meteorite Fragments

Pieces of a meteor that have survived the passage through Earth's atmosphere and landed on the surface.

Expert Power

Influence or authority stemming from specialized knowledge, expertise, or skills, which others depend on.