DB Unit 3 Economics

1. Prompt:Read“YOU’RE THE ECONOMIST: Recession Takes a Bite Out of Gator Profits” in Chapter 8. Assuming gator farming is perfectly competitive, explain the long-run competitive equilibrium condition for the typical gator farmer and the industry as a whole.

2. Read “YOU’RE THE ECONOMIST: The Standard Oil Monopoly” in Chapter 9. If Standard Oil was a natural monopoly, what would happen to the average cost of producing gasoline after the company was split up? Explain using an LRAC curve.

o Requirements: 250 words minimum for each question