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The black lines on the graph show the unit cost curves of a representative rm in a constant cost competitive industry. The black supply and demand curve shows the market for the good in equilibrium at a price P1. Suppose an improvement in technology occurs. Unit Cost Curves of a Representative Firm 5 per unit Market Supply and Demand C] The improvement in technology shifts the ATC curve from ATC1 to ATCZ and the MC curve from MC1 to MC2 because the price of capital and labor stays the same but any combination of capital and labor produces more of the good. C] Before the improvement in technology, the rm produced q1 units of output and broke even. C] Before the improvement in technology, the rm produced q1 units of output and lost money. C] Before the improvement in technology, the rm produced q1 units of output and made a prot. C] After the improvement in technology, if the rm continues to produce q1 when the price is P1, the rm is not maximizing prot because producing an additional unit of the good costs more than P1. C] After the improvement in technology, if the rm continues to produce q1 when the price is P1, the rm is not maximizing prot because producing an additional unit of the good costs less than P1. The black lines on the graph show the unit cost curves of a representative rm in a constant cost competitive industry. The black supply and demand curve shows the market for the good in equilibrium at a price P1. Suppose an improvement in technology occurs. Unit Cost Curves of a Representative Firm 5 per unit Market Supply and Demand [3 After the improvement in technology, at the price P1 the rm will continue to produce ql because at that level of output the rm is making a prot. C] After the improvement in technology, at the price P1 the rm will increase output to qz because given the improvement in technology that is the quantity where ATC is minimized. C] After the improvement in technology, at the price P1 the rm will increase output to q2 because given the improvement in technology that is the quantity where price equals MC. C] The shaded blue area is the prot the rm will make after the technological improvement and after the rm has adjusted its output level to the new lower unit costs. [3 In the short run after the technological improvement, each rm in the industry will produce more output at any given price. This will shift the Short Industry Supply Curve from black to blue. C] In the short run after the technological improvement, each rm in the industry will produce more output at any given price. This will shift the Short Industry Supply Curve from black to green. C] In the short run after the technological improvement, each rm in the industry will earn a prot. [3 In the short run after the technological improvement, each rm in the industry will break even. O In the short run after the technological improvement, each firm in the industry will lose money. O In the long run, new firms will enter the industry shifting the Short Run Supply Curve from blue to green. In the long run, new firms will enter the industry shifting the Short Run Supply Curve from black to green. O In the long run, new firms will enter the industry shifting the Short Run Supply Curve from black to green. O In the long run firms will continue to enter the industry, shifting the demand curve to the left until the price has fallen to the minimum of ATC1. O In the long run firms will continue to enter the industry, shifting the demand curve to the right until the price has fallen to the minimum of ATC1. In the long run firms will continue to enter the industry, shifting the demand curve to the left until the price has fallen to the minimum of ATC2. O In the long run firms will continue to enter the industry, shifting the demand curve to the right until the price has fallen to the minimum of ATC2. In the short run, existing firms benefit from the improvement in technology because their profits increase. O In the short run, existing firms don't benefit from the improvement in technology because their profits stay the same. In the long run, existing firms benefit from the improvement in technology because their profits increase. O In the long run, existing firms don't benefit from the improvement in technology because their profits stay the same. O In the short run, consumers don't benefit from the improvement in technology because businesses capture all the benefits as increased profits. O In the short run, consumers benefit from the improvement in technology because the price of the good falls. O In the short run, consumers don't benefit from the improvement in technology because price remains the same. O In the long run, consumers don't benefit from the improvement in technology because businesses capture all the benefits as increased profits.O In the long run, consumers benefit from the improvement in technology because the price of the good falls. In the short run, consumers don't benefit from the improvement in technology because price remains the same.The black lines on the graph show the unit cost curves of a representative rm in a constant cost competitive industry. The black supply and demand curve shows the market for the good in equilibrium at a price P1. Suppose the price of labor fell. Unit Cost Curves of a Representative Firm 5 per unit Market Supply and Demand C] The drop in the price of labor shifts the ATC curve from ATC1 to ATC2 and the MC curve from MCl to MC2 because the amount of capital and labor required to produce a given quantity of the good stays the same but the price of those inputs fall. C] Before the drop in the price of labor, the rm produced q1 units of output and broke even. C] Before the drop in the price of labor, the rm produced q1 units of output and lost money. C] Before the drop in the price of labor, the rm produced ql units of output and made a prot. [3 After the drop in the price of labor, if the rm continues to produce q1 when the price is P1, the rm is not maximizing prot because producing an additional unit of the good costs more than P1. C] After the drop in the price of labor, if the rm continues to produce q1 when the price is P1, the rm is not maximizing prot because producing an additional unit of the good costs less than P1. The black lines on the graph show the unit cost curves of a representative rm in a constant cost competitive industry. The black supply and demand curve shows the market for the good in equilibrium at a price P1. Suppose the price of labor drops. Unit Cost Curves of a Representative Firm S per unit Market Suppty and Demand C] After the price of labor drops, at the price P1 the rm will continue to produce q1 because at that level of output the rm is making a prot. C] After the price of labor drops, at the price P1 the rm will increase output to Cu because given the price of labor drops that is the quantity where ATC is minimized. C] After the price of labor drops, at the price P1 the rm will increase output to 12 because given the price of labor drops that is the quantity where price equals MC. [3 The shaded blue area is the prot the rm will make after the price of labor drops and after the rm has adjusted its output level to the new lower unit costs. C] In the short run after the price of labor drops, each rm in the industry will produce more output at any given price. This will shift the Short industry Supply Curve from black to blue. [3 In the short run after the price of labor drops, each rm in the industry will produce more output at any given price. This will shift the Short Industry Supply Curve from black to green. C] In the short run after the price of labor drops, each rm in the industry will earn a prot. [3 In the short run after the price of labor drops, each rm in the industry will break even. O In the short run after the price of labor drops, each firm in the industry will lose money. O In the long run, new firms will enter the industry shifting the Short Run Supply Curve from blue to green. O In the long run, new firms will enter the industry shifting the Short Run Supply Curve from black to green. In the long run, new firms will enter the industry shifting the Short Run Supply Curve from black to green. In the long run firms will continue to enter the industry, shifting the demand curve to the left until the price has fallen to the minimum of ATC1. O In the long run firms will continue to enter the industry, shifting the demand curve to the right until the price has fallen to the minimum of ATC1. O In the long run firms will continue to enter the industry, shifting the demand curve to the left until the price has fallen to the minimum of ATC2. O In the long run firms will continue to enter the industry, shifting the demand curve to the right until the price has fallen to the minimum of ATC2. O In the short run, existing firms benefit from the drop in the price of labor because their profits increase. O In the short run, existing firms don't benefit from the drop in the price of labor because their profits stay the same. O In the long run, existing firms benefit from the drop in the price of labor because their profits increase. O In the long run, existing firms don't benefit from the drop in the price of labor because their profits stay the same. O) In the short run, consumers don't benefit from the drop in the price of labor because businesses capture all the benefits as increased profits. O In the short run, consumers benefit from the drop in the price of labor because the price of the good falls. O In the short run, consumers don't benefit from the drop in the price of labor because price remains the same. O In the long run, consumers don't benefit from the drop in the price of labor because businesses capture all the benefits as increased profits.O In the long run, consumers benefit from the drop in the price of labor because the price of the good falls. () In the short run, consumers don't benefit from the drop in the price of labor because price remains the same.The black lines on the graph show the unit cost curves of a representative rm in a constant cost competitive industry. The black supply and demand curve shows the market for the good in equilibrium at a price P1. Suppose there price of a complement decreased or income fell and the good is inferior. Unlt Cost Curves of a Representatlve Firm $ per unit Market Supply and Demand [j The change in the price of a complement or the change in income would shift the demand curve from D1 to D2. C] The change in the price of a complement or the change in income would shift the demand curve from D1 to D3. [3 Before the drop in the price of labor, the rm produced q1 units of output and lost money. C] Before the drop in the price of labor, the rm produced q1 units of output and made a prot. [3 Before the drop in the price of labor, the rm produced q1 units of output and broke even. C] The change in the price of a complement or the change in income would shift the ATC curve from ATC1 to ATCZ. [j The change in the price of a complement or the change in income would shift the ATC curve from ATC1 to ATC3