Question

Subject: Economic Issuse in Health and Medical care

Discuss using graphs the following situations. (3 possible points)

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In a competitive market, an individual firm A was making profits in the short run. Then all of a sudden his asian supplier ran out of business and he ended up having to source the raw-materials locally at a higher price. Show graphically what will happen to his profitability.

After a few months, the substitute for the product of A went out of business and that gave a chance for the price of A to be raised. Show graphically hat would happen to the profits in the long run.

Show graphically what would happen to the profitability of firm A in the long run.

Answer 1