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Suppose that the market for avocados was initial in a long-run equilibrium. The market then experiences a positive demand shock after the recent Avocados from
Suppose that the market for avocados was initial in a long-run equilibrium. The market then experiences a positive demand shock after the recent "Avocados from Mexico" advertising campaign. Assume that all avocado farms have the standard U-shaped average and marginal cost curves studied in class, and that there is the possibility of unlimited free exit or free entry of new firms into avocado farming with those same cost curves. Relative to the initial long-run equilibrium, the new
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