California\'s commercial drone industry is taking off Customers are finding ever

Question

California's commercial drone industry is taking off Customers are finding ever more creative ways to use drones, and Explain what is happening in the market for commercial drones. How would you expect the price of a drone to change in the short run and the long run? s Inc. America's largest producer of consumer drones, expects sales to soar. Source Los Angeles Times, June 13 short run and in the long run? How would you expect the economic profit of a drone producer such as 3D Robotics to change in the in the short run In the long run, the supply of drones The drones is At the new long-run equilibnum, the price of a drone is producers make and drone OA, demand for,increasing ( B, the supply of increasing O c, demand for, decreasing O D. supply of, decreasing In the short run, the equilibrium price of a drone of drone producers OA, falls, decreases A, lower, an economic profit O B. higher, an economic profit lc. lower; zero economic profit and the economic proft o C. lower zero economic pro D. unchanged, zero economic profit B. rises, remains unchanged O C. rises, increases ( D. falls, remains unchanged

Explanation / Answer

The demand for drones is increasing in the short run. This is due to the innovative ways if using the drones. The answer is (A).

In short run the equilibrium price of drones (C) increases and the economic profit of drone producers increases due to rising prices and greater demand.

In the long run there will be increase in the supply of drones as new producers would enter the market due to the availability of economic profits in this market.

At the long run equilibrium the price of drone is lower and drone producers make zero economic profits (C).

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