Q. Assume that his gold-mining industry is competitive.
Illustrate a long-run equilibrium using diagrams for the gold market and for a representative gold mine.
Suppose that an increase in jewelry demand induces a surge in the demand for gold. Show what happens in the short run to the gold market and to each existing gold mine.
If the demand for gold residue high explain what would happen to the price in excess of time? Exclusively, what would be the new long-run equilibrium price be above, below or equal to the short run equilibrium price? Is it possible for the new long-run equilibrium price to be above the original long-run price of equilibrium? Explicate?