a. Explain why the economic profit that Callaway makes on women’s golf clubs is likely to be temporary.

b. Draw a graph to illustrate Callaway’s cost and revenue curves in the market for women’s golf clubs in the long run. Mark the firm’s excess capacity.

A quarter of golfers today are women and the number keeps growing. And golf club manufacturers are paying attention and developing women’s clubs.
Callaway and 14 other firms compete in this market.