The market for paper is perfectly competitive. The adjacent gure (Figure A) shows the initial supply curve (80) and the initial demand curve (DO) in the market for paper. Suppose that there is now an increase in the market demand for paper by 300 tons at each price. Using the line drawing tool, show the short run effect of this increase on the market for paper by shifting and labeling the curve appropriately. Carefully follow the instructions above and only draw the required objects. In the long run, the supply curve will shift rightward from its position in the short run. The adjacent gure (Figure B) shows a typical paper manufacturing rm with the long-run average cost (LAC), average total cost (ATC), marginal cost (MC), demand (do), and marginal revenue (MR) curves showing the initial long-run outcome. Which of the following statements describe the short-run effects of an increase in the market demand for paper? (Select all that apply.) E A. The firm will continue to make only a competitive return (zero economic prot). E B. Atypical firm will now make an economic prot. E C. The rm produces 8 tons of paper and makes an economic prot because P > MC. E D. The firm's demand curve shifts up from do = MR0 to d1 = MR1, where P: $600 per ton. In the long run, a typical firm will make only a competitive return . $300 Figure A: Market for paper Price ($ per ton of paper) '69 4:. O O Price and cost ($ per ton of paper) 0 50 100 150 200 250 300 350 400 450 500 550 Quantity (tons of paper per month) Lt A LA: ESIZEIII IIIIIIIIEWE 11 Quantity (tons of paper per month)