Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price

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Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price of oil rises.

a. Using diagrams show what happens to the cost curves of an individual boat-making firm and to the market supply curve.

b. What happens to the profits of boat makers in the short run? What happens to the number of boat makers in the long run?

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Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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Question Posted: Dec 14, 2012 06:59 AM

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Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price

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a As shown in Figure the typical firms initial marginalcost curve is MC 1 and its averagetotalcost c...View the full answer

Principles of economics

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