The substitution effect is the concept that changes in consumption of a good result from changes in the relative price of a competing good

The length of the short run is the same for all firms

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Suppose a fashion designer wins a bid to design clothes for the characters of a movie. During his work he finds out that the payment he receives would not only cover his production costs but also earn him profits. The producer of the movie can be said to be facing a winner's curse

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