A2-1. If a Prof leaves their $100,000 per year job to start a business that earns annual revenue $400,000, and has annual labour and rental costs of $200,000, the economic profit of the business is $200,000. A2-2. A decrease in the wage rate will cause a firm's marginal cost curve to shift down. A2 5. For an increase in output, average costs change by more in the short-run than in the long-run, but for a decrease in output, the opposite is true. A2-4. If the pandemic causes firms in a competitive industry to spend $100,000 per month on safety measures (regardless of the output level), the firms bear this cost in the short-run, but consumers bear it in the long-run