7. Short-run and long-run effects of a shift in demand Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 25 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links jackfruit consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand jackfruit at every price. In the short run, firms will respond by
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- 1.0 - If the demand forApple Cinnamon Cheerios decreases at all prices, what will happen to thedemand curve? Show the shift in the demand curve on the same diagram and explain what happensto the firm’s output and profits.Price elasticity of supply in the short run and long run The following graph shows the long-run supply curve for pistachios. Place the orange line (square symbol) on the following graph to show the most likely short-run supply curve for pistachios. (Note: Place the points of the line either on O and T or on O and Y.) PRICE (Dollars per pound) 48 40 32 24 8 0 0 Long-Run Supply 2 6 8 10 QUANTITY (Thousands of pounds of pistachios) 12 Short-Run Supply Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.1 Hypothetical Case 1 The following equations describe the long-run situation for prices and costs, where the numbers indicate the amounts of labor and capital needed to produce a unit of wheat and cloth. W is the wage rate/hour and R is the rental rate/hour. Price of wheat = 1 W + 2 R Price of cloth = 2 W + 1 R In autarky, the price of wheat is 5 and the price of cloth is 4. As trade opens up wheat price rises from 5 to 6. Cloth price remains at 4. Consider Hypothetical Case 1 above. After trade opens up, how many units of wheat can a worker buy with one hour of labor?
- 3. What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ?Draw a graph and explain. 4. How can we increase the Total Revenue of products by using elasticity ?Explain them briefly.23. Suppose the market for gourmet chocolate is in long-run equilibrium, and an economic downturn has reduced consumer discretionary incomes. Assume chocolate is a normal good, and the chocolate producers have identical cost structures. What will happen to demand—shift right, shift left, no shift? What will happen to profits for chocolate producers in the short run—increase, decrease, or no change? What will happen to the short-run supply curve—increase, decrease, or no change? What will happen to the long-run supply curve—increase, decrease, or no change?7. Short-run supply and long-run equilibrium Consider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. If there were 20 firms in this market, the short-run equilibrium price of copper would be ___ per…
- 4) Explain why a firm should continue to operate in the short run so long as market price is greater the firm's average variable cost at the profit-maximizing level of output.Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per block of tofu and quantity of 175 million blocks per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tofu consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand tofu at every price. In the short run, firms will respond by .“New England power producers are preparing for potential strain on the grid this winter [Winter 2022-23: December 2022 through February 2023] as a surge in natural-gas demand abroad threatens to reduce supplies they need to generate electricity.” For Question 1, consider the New England market for electricity prior to Winter 2022-23 by considering this setting roughly one year ago, in December 2021. Assume that in December of 2021, the market for electricity was in a short-run equilibrium. Draw a graph that shows supply and demand for electricity market in its December 2021 equilibrium. This graph will serve as a starting point for your analysis in Questions 2 through 5. When drawing this graph, please assume that the demand curve is downward sloping and supply curve is upward sloping. Clearly show the market equilibrium in December 2021, labeling the equilibrium price and quantity. Please remember to clearly label your axes, with P on the vertical axis and Q on the horizontal axis.…
- Q) The short-run market demand andsupply for Kente cloth are expressed as follows:Demand: ? = 40−0.25?Supply: ? = 5+0.05?Marginal cost: −20 +4? a)The short-run level of output is ___________ metres.[1] 40.00[2] 5.05[3] 35.30[4] 20.00[5] 7.7126.A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; marginal cost > marginal revenue E-Average total cost < price; marginal cost > marginal revenue 27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case? A-The market price was less than the firm's average variable cost. B-The firm was earning normal profits in the short run but projected economic losses in the long run. C-The firm's average total cost was higher than its average revenue. D-The market price was between the firm's average variable cost and average total cost. E-The…1) Graphite is an input into the production of pencils. If the pencil market is perfectly competitive, then in the short-run an increase in the price of graphite will cause: (a) The supply curve for pencils to shift up: True or False? (b) An increase in the market price for pencils. True or False? (c) The demand curve for pencils to shift down. True or False? For each of (a), (b), and (c) above, indicate whether the statement is True or False? Explain each briefly. Provide a graph illustrating your answer