The reduction in demand leads losses. The size of the losses
for the typical remodeling firm are shown as the red area to the right. 
The reduction in demand leads losses. The size of the losses
for the typical remodeling firm are shown as the red area to the right.
While P2, Q2 represent a new short run equilibrium, it cannot be a long run
equilibrium. Due to the losses some firms will leave the industry
since losses mean that owners can earn more in other activities.
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