Problem
Assume that X is produced in a perfectly competitive industry where firms that currently operate and potential competitors both have identical cost curves. Current output is 1 million units a year. What happens to industry equilibrium if a public agency competes with existing producers of X and gives away 100,000 units per year to randomly selected people who would otherwise have purchased X. Does the output of X fall in the short run? In the long run?
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.