Original long-run equliibrium price


Assume that the gold-mining industry is competitive. a. Illustrate a long-run equilibrium using diagrams for the gold market and for a representative gold mine. b.Suppose that increaseing in jewelry demand induces a surgein the demand for gold. Using your deagrams from part a, show what happens in the short run to the gold market and to each existing gold mine. c. If the demand for gold remainshigh, what would happen to the price over time? Specifically, would the new long-run equilibrium price above, below, or equal to the short run equilibrium price in part b? Is it possible for the new long-run equilibrium price to be above the original long-run equliibrium price? Explain.

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Macroeconomics: Original long-run equliibrium price
Reference No:- TGS062360

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