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***Using this table and graph I need help answering these two questions*** Assuming that the firm is operating in long-run equilibrium, how would they respond

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***Using this table and graph I need help answering these two questions***

  1. Assuming that the firm is operating in long-run equilibrium, how would they respond to a shift of market demand that drove equilibrium price up by 20? Referring to your diagram, explain, a) their short-run production decision and b) their long-run choice to build a copy of their existing plant (or not).
  2. How would long-run behavior be affected if the increase in output demand forced the wage rate up 50? Numeric answer and explanation required.
3.50 L VC ATC MC 3.00 0 0 1 9 2.50 18 2.00 2 3 4 5 6 Q 0 0 39 89 130 166 196 220 240 256 265 268 27 36 45 AVC 0 0.23 0.20 0.21 0.22 0.23 0.25 0.26 0.28 0.31 0.34 TC 100 109 118 127 136 145 154 163 172 181 190 1.50 2.79 1.33 0.98 0.82 0.74 0.70 0.68 0.67 0.68 0.71 0.23 0.18 0.22 0.25 0.30 0.38 0.45 0.56 1.00 3.00 54 1.00 7 63 0.50 8 9 72 81 90 10 0.00 2 3 4 5 6 8 10 AVC ATC -MC WAGE $9 FIXED COST $100 3.50 L VC ATC MC 3.00 0 0 1 9 2.50 18 2.00 2 3 4 5 6 Q 0 0 39 89 130 166 196 220 240 256 265 268 27 36 45 AVC 0 0.23 0.20 0.21 0.22 0.23 0.25 0.26 0.28 0.31 0.34 TC 100 109 118 127 136 145 154 163 172 181 190 1.50 2.79 1.33 0.98 0.82 0.74 0.70 0.68 0.67 0.68 0.71 0.23 0.18 0.22 0.25 0.30 0.38 0.45 0.56 1.00 3.00 54 1.00 7 63 0.50 8 9 72 81 90 10 0.00 2 3 4 5 6 8 10 AVC ATC -MC WAGE $9 FIXED COST $100

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