Assume that the market for chewing gum is in long-run equilibrium. Using two graphs—one for the market and one for a typical gum producer—trace through the impact of a federal law that prohibits smoking in all buildings and parking lots. (You can assume that the ban on smoking causes smokers to redirect their oral fixation to chewing gum.) What effect will the law have on:

a) the equilibrium price and quantity of gum in the short run?

b) the profitability of existing firms in the short run?

c) How, if at all, would your answers to

(a) and

(b) change if you were instead considering the long run?

d) How, if at all, would your answer to

(c) change if new entrants into the chewing gum market cannot produce at the same low cost as existing producers?