Part one: Assume that initially a perfectly competitve industry is in long-run equilibrium.
a. For the typical
(ii) The industry's price and level of output.
Part two: In a particular product market there is only one seller and there are significant barriers to entry.
a. Explain how this firm determines its equilibrium output and price.
b. Explain whether or not this firm is producing the economically efficient level of output. In your answer include a brief definition of economic effciency.
Part three: What determines the demand for a resource (factor of production)? Why is the demand for a resource downsloping?