Suppose the book-printing industry is competitive and begins in a long-run equilibrium.
Draw a diagram describing the typical firm in the industry.
Hi-Tech Printing Co. invents a new process that sharply reduces its cost of printing books. What happens to Hi- Tech's profits and the price of books in the short run when Hi-Tech's patent prevents other firms from adopting the new technology? Draw it.
What happens in the long run when the patent expires and other firms are free to use the technology? Draw it.