Answered: Now suppose that the economy improves…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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Now suppose that the economy improves as U.S. manufacturers produce more output. What impact will this have on the independent trucking industry in the short run market price, output and market equilibrium quantity? What impact will this have on the firm's profits? What impact will the increase in manufacturing output have in the long run on each of these variables? Show graphically and explain your reasoning.

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Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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