1. Paper Bags R Us, a typical profit-maximizing firm, i operating in a constant-cost, perfectly compell 1n h 11nln-r 11r1 iii Draw correctly labeled Side-by-side graphs fbr the paper bag market and for Paper Bags R Us Tl? show each of the following i. rice and output for the industry ii. Price and output for Paper Bags R Us M Assume paper bags are an inferior good and t at the income of consumers increases. Assume that Paper Bags R Us continues to produce. On your graphs in part (a), show th ff f in r in in m n h f h following in the short run. Price and output for the industry Price and output for Paper Bags R Us. Ar ooss or profit for Paper Bags R Us Fo owmg t e increase in consumer incomes, w at must be true for Paper Bags R Us to continue to produce in the short run? a Assume that the industry adjusts to a new long-run equilibrium. Compare the following between the initial and the new long-run equilibrium. The number of firms in the industry Inanewgrap , ag market and for Paper Bags R Us with the new government tax and show the resulting price and output for the industry B What happens to the Marginal Cost curve for the firm: increase, decrease or stay the same? What happens to the Average Total Cost curve for the firm: increase, decrease or stay the same