Suppose the book-printing industry is competitive and begins in a long run equilibrium.

1. Draw a diagram showing the average total cost, marginal cost, marginal revenue, and supply curve of the typical firm in the industry.
2. Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books. What happens to the price of books in the short run when a Hi-Tech patent prevents other firms from using the new technology?
3. What happens in the long run when the patent expires and other firms are free to use the technology?