Suppose the market of surgical mask in Country D is competitive.а.Assume the market of surgical mask in Country D operates at her long runequilibrium. Draw side-by-side diagrams to show the long run equilibriumconditions for a typical firm producing surgical masks and the market for surgicalmasks. Label your diagrams clearly.b.Suppose a trade war happens and many other countries refuse to buy surgical masksfrom Country D.Making use of your diagram in (a), explain its short run effects on the equilibriumprice and quantity in the market of surgical masks in Country D, and the output andthe profit/loss of a typical firm producing surgical masks in Country D.

In following graph, the left panel shows the market equilibrium where demand and supply curves (D0…

Assume the market of surgical mask in Country D operates at her long run equilibrium. Draw side-by-side diagrams to show the long run equilibrium conditions for a typical firm producing surgical masks and the market for surgical masks. Label your diagrams clearly. Suppose a trade war happens and many other countries refuse to buy surgical masks from Country D. Making use of your diagram in (a), explain its short run effects on the equilibrium price and quantity in the market of surgical masks in Country D, and the output and the profit/loss of a typical firm producing surgical masks in Country D.

Assume the market of surgical mask in Country D operates at her long run equilibrium. Draw side-by-side diagrams to show the long run equilibrium conditions for a typical firm producing surgical masks and the market for surgical masks. Label your diagrams clearly. Suppose a trade war happens and many other countries refuse to buy surgical masks from Country D. Making use of your diagram in (a), explain its short run effects on the equilibrium price and quantity in the market of surgical masks in Country D, and the output and the profit/loss of a typical firm producing surgical masks in Country D.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.3P

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