Problem
In 2004 FAO Schwartz closed its 89 Zany Brainy stores.
a. Demonstrate graphically the relationship between ATC, AVC, and price faced by Zany Brainy stores when they decided to close.
b. Assuming the market is perfectly competitive and is a constant-cost industry, what will happen in this market in the long run? Demonstrate with market supply and demand curves.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.