October 8, 2015

Homework Help: Economics

Posted by John on Monday, March 29, 2010 at 11:44am.

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 costs of production? (will production costs rise or fall and justify why)
b. The price you can charge for your modeling services? why? (will production costs rise or fall and justify why. How does the supply and/or demand curve shift and what happens to equilibrium prices?)
c. Profits in home remodeling? why? (Is this same as economic profits? will they rise or fall and justify answer)

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