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A book printing company operates under zero-profit condition in a competitive market. Suppose this company invents a new production technology which reduce its average total costs in the process of printing. If the new production technology is protected by a patent.
i) What will happen to the price of books and the company’s profit in the short run?
Ii) What will happen to the price of books and the company’s profit when the patent expires?
Discuss with diagram(s)
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Spivey just won the Powerball lottery! The $25,000,000 jackpot will be paid in 10 annual instalments of $2,500,000 each, with the first payment to be paid immediately. Spivey's opportunity cost of capital (interest rate) is 4% per year. What is the p..
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