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(Solution document) The University of Iowa has followed the lead of other universities in building a new Recreation Center.


The University of Iowa has followed the lead of other universities in building a new Recreation Center. You can think of this as adding to the supply of exercise services in Iowa City in addition to service at other private and public facilities. If there was a competitive market for exercise services in Iowa City before the Recreation Center was built, what would the impact of the Recreation Center be on total surplus in the market for exercise service assuming that other firms in this market continue to provide the same services? (Explain your answer.)

 







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