Part (iv): Suppose that the United States begins to trade balloons internationally. Would Rockin' Rides now earn a profit or loss if it were to produce and sell the quantity that you identified in part (45,000)? Explain your reasoning carefully.

Part (v): Based on your answer to part (iv), two things should happen as the balloon market adjusts to foreign competition. The quantity produced by each individual firm (e.g., Rockin' Rides) will change, and the total number of firms active in the market will change. Identify and explain the direction of each of these changes.