Homework Help: economics

Posted by Erika on Monday, November 7, 2011 at 5:58pm.

Suppose that bicycles are produced by a perfectly competitive, constant cost industry. Which of the following will have a larger effect on the long-run price of bicycles: (1) a government program to advertise the health benefits of bicycling, or (2) a government program that increases the demand for steel, an input in the manufacture of bicycles that is produced in an increasing cost industry? Explain briefly.

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