Suppose you own a home remodeling company. You are currently earning short run profits. The home remodeling industry is an increasing-cost industry. In the long run, what do you expect will happen to:
A) Your firm's cost of products? Explain.
B) The price you can charge for your remodeling services? Why?
C) Profits in home remodeling? Why?
Because my firm is making an economic profit, I expect that in the long run, new firms will enter the industry. The effects will be:
A) The increase ...
My firm is making a short-run profit in an increasing-cost industry. What will happen to my costs, prices and profits in the long run?