The federal government allows the use of a growth hormone that increases the amount of milk a cow will produce. Partial credit was assigned for the answers in parentheses. The federal government allows the use of a growth hormone that increases the amount of milk a cow will produce. Also, it would reduce applications for next year's class from 1600 to 1460. Yes, they do seem reasonable.
Applicants can choose from a host of other schools.
The more available substitutes are, the more elastic demand will be. The graph of MC and ATC is shown below. AVC is shown for reference. Show this on the graph as well. In the long run, the firm would choose to exit from the industry if it could not make a profit.