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Suppose that after the change described in Question 2 the market returns to long-run equilibrium; and the increase in demand described in that question is
Suppose that after the change described in Question 2 the market returns to long-run equilibrium; and the increase in demand described in that question is permanent. Let P2 denote the new long-run equilibrium price, Q2 denote the new long-run equilibrium market quantity, and q2 denote the new equilibrium quantity produced by an individual (representative) firm. How does the initial quantity produced by an individual (representative) firm from Question 1 (q0) compare to q2? Hint: Even though this question does not require submitting any attachments, you may consider drawing a side-by-side graph of the new long run equilibrium for your own use. Group of answer choices It is impossible to determine if q0 is higher, lower, or equal to q2 . q0 > q2 q0 = q2 q0 < q2
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