During the late 1970s, the most popular form of music in the United States was disco. Sparked by the film Saturday Night Fever , the disco craze swept the country. It wasn’t just the music, it was...

During the late 1970s, the most popular form of music in the United States was disco. Sparked by the film
Saturday Night Fever, the disco craze swept the country. It wasn’t just the music, it was also the dancing. And no disco dance club was complete without a disco ball: a mirrored ball suspended from the ceiling. The disco ball would be rotating, with spotlights shined upon it, so that lights would appear to be flashing all across the dance floor. During the heyday of disco, a company called Omega Products International (based in Louisville, Kentucky) made 90% of all the disco balls sold in the U.S.

1. Suppose that for some reason disco music and disco dancing become popular again. Thus the demand for disco balls increases. What will happen to the price of disco balls, the supply of disco balls, and Omega’s profits
   in the short run?
   Explain your answer.

1. Under what conditions will the increased demand for disco balls enable Omega Products International to make above-normal profits
   in the long run? Explain how that condition (or those conditions) enable profits to be above-normal in the long run.