Question 3: In the market for running shoes, all the firms face a similar demand curve and have similar cost curves to those of Lite and Kool in problem 2.

What happens to the number of firms producing running shoes in the long run?

What happens to the price of running shoes in the long run?

What happens to the quantity of running shoes produced by Lite and Kool in the long run?

What happens to the quantity of running shoes in the entire market in the long run?

Does Lite and Kool have excess capacity in the long run?

Why, if Lite and Kool has excess capacity in the long run, doesnt the firm decrease its capacity?

g. What is the relationship between Lite and Kools price and marginal cost?

The figure shows the situation facing Lite and Kool Inc., a producer of running shoes.

seee the graph and answer

economic subject

The figure shows the situation facing Lite and Kool Inc., a producer of running shoes. 100 MC ATC Price and colors per part 20 40 ME 50 100 150 200 Quantity point of running shoes per