Many small boats are made of fiberglass and a resinderived from crude oil. Suppose that the price of oilrises.a. Using diagrams, show what happens to the costcurves of an individual boat-making firm and tothe market supply curve.b. What happens to the profits of boat makers in theshort run? What happens to the number of boatmakers in the long run?

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
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Many small boats are made of fiberglass and a resin
derived from crude oil. Suppose that the price of oil
rises.
a. Using diagrams, show what happens to the cost
curves of an individual boat-making firm and to
the market supply curve.
b. What happens to the profits of boat makers in the
short run? What happens to the number of boat
makers in the long run?

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