1. After you have studied Economics in the News on pp. 246-247, answer the following questions.

a)Explain the distinction between the short run and the long run and identify when Amazon would want to make each type of decision.

b)Explain economies of scale. Does Amazon reap economies of scale in the example with the assumed costs on p. 247?

c)Amend the graph in Fig. 2 on p. 247 to illustrate Amazon's ATC1 and LRAC curves if it experiences economies of scale

2. Today's Problem comes from Chapter 11 - Problems 5 and 6. Make your post a good one.

The market for paper is perfectly competitive and 1,000 firms produce paper. The first table sets out the market demand schedule for paper. The second table sets out the costs of each producer of paper. Calculate the market price, the market output, the quantity produced by each firm, and the firm's economic profit or loss.

In Problem 5, new technology decreases the demand for paper and the demand schedule becomes the schedule shown in the table. If firms have the same costs set out in Problem 5, what is the market price and the firm's economic profit or loss in the short run?