2. Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price of oil rises. ( a ) Using diagrams, show what happens to the cost curves of an individual boat-making firm and to the market supply curve. ( b ) What happens to the profits of boat makers in the short run? What happens to the number of boat makers in the long run?

2. Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price of oil rises. ( a ) Using diagrams, show what happens to the cost curves of an individual boat-making firm and to the market supply curve. ( b ) What happens to the profits of boat makers in the short run? What happens to the number of boat makers in the long run?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 1PA

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