The gold mining industry is perfectly competitive industry and in long run equilibrium.
b) Suppose that an increase in jewelry demand induces a surge in the demand for gold. Use your graph to illustrate the short run effect on i) market demand; ii) market supply; iii) industry output and price; iv) the demand curve facing a typical firm in the industry v) the output of a typical firm; vi) profits of a typical firm. (5p)
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