1. With the aid of a diagram, explain the income and substitution effects of a price change 2. With the aid of a well labelled diagrams. explain how a profit-maximizing firm operating under perfect competition adjusts from short run to long run equilibrium.
1. With the aid of a diagram, explain the income and substitution effects of a price change 2. With the aid of a well labelled diagrams. explain how a profit-maximizing firm operating under perfect competition adjusts from short run to long run equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. With the aid of a diagram, explain the income and substitution effects of a price change 2. With the aid of a well labelled diagrams,
explain how a profit-maximizing firm operating under perfect competition adjusts from short run to long run equilibrium.
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