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Kati's Kites Is a Profit-Maximizing Firm in a Competitive Market

question 121

Essay

Kati's Kites is a profit-maximizing firm in a competitive market.
a. Draw a graph of Kati's firm next to a graph for the market, assuming the market is in long-run equilibrium.
b. Now assume the demand for kites decreases. Redraw a graph of Kati's firm next to a graph for the market.
c. What do you expect to happen in the long run?


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