Business, 04.04.2020 08:41 lineaeriksen

Before fracking, the natural gas industry was a long-run increasing cost industry, because increasing output required tapping more inaccessible reserves of natural gas. Assume the natural gas industry is perfectly competitive and that gas companies lease their fields from landlords. a. Show on the natural gas industry and a representative firm in long-run equilibrium. b. Suppose OPEC actions cause the price of oil to rise. Show on your graphs the effect of an increase in the price of OIL on a NATURAL GAS firm and on the NATURAL GAS market in the short-run. (Assume that the price of oil does not affect the cost of producing natural gas.) How are the price, quantity, profit, and number of natural gas firms affected in the short-run

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Before fracking, the natural gas industry was a long-run increasing cost industry, because increasin...

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