A representative firm producing watermelons is earning a normal profit at a price of $35 per hundred

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A representative firm producing watermelons is earning a normal profit at a price of $35 per hundred pounds. Draw a supply and demand diagram showing equilibrium at this price. Assuming that the industry is a constant-cost industry, use the diagram to show the long-term adjustment of the industry as demand falls over time. Explain the adjustment mechanism.

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Principles Of Economics

ISBN: 9781292294698

13th Global Edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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