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4. Draw a two-panel model (graph) for a firm producing and selling good X in a...

4. Draw a two-panel model (graph) for a firm producing and selling good X in a purely competitive market. In the first panel show the market for good X; in the second panel show the firm in long run equilibrium.

·         Show the effects of an increase in demand for good X in this market. Show the effects of a decrease in demand for good X in this market. What conclusions can be drawn from this model?

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