Suppose that shoes are provided by a competitive constant-cost industry. Suppose the government starts requiring each shoemaker
Question:
Suppose the government starts requiring each shoemaker to pay an annual license fee.
a. Does the price of shoes change by more in the short run or in the long run?
b. Does the industry-wide quantity change by more in the short run or in the long run?
c. Does the quantity provided by each shoemaker change by more in the short run or in the long run?
d. Do the profits of shoemakers change by more in the short run or in the long run?
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Step by Step Answer:
a Price does not change in the shor...View the full answer
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