The following relationship between price, average total cost, and the number of firms describes an industry in a single country.
(A)Graph the relationship between average total cost and the number of firms, as well as the relationship between price and the number of firms.
(B)Find the long-run equilibrium price and number of firms.
(C)Suppose the country opens to trade with other countries. Which line will shift and in which direction? What will happen to the long-run equilibrium price and the number of firms in the industry?
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