3.7 Describe the long-run outcome for a competitive wild rice producer and the competitive wild rice industry. Now suppose that the demand for wild rice increases.

a. Discuss the adjustments by the firm and the industry.

b. What happens to the firm’s long-run economic profit?

Now suppose that demand increases again but that the government forbids entry by new wild rice producers.

c. Discuss the adjustments by the firm and the industry.

d. What happens to the firm’s long-run economic profit?

e. Is the firm’s long-run economic profit higher when entry is forbidden or when entry is allowed?

f. What is the managerial lesson illustrated in your answer to part e?