8. Short-run and long-run effects of a shift in demandSuppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 400 million pounds per year. Suppo:the Surgeon General issues a report saying that eating turkey is bad for your health.The Surgeon General's report will cause consumers to demandturkey at every price. In the short run, firms will respond byShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the Surgeon General's report.109SupplyDemand8SupplyPRICE (Dollars per pound)5321080 160 240 320 400 480 560QUANTITY (Millions of pounds)0In the long run, some firms will respond byD2D₁640 720 800until Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the Surgeon General's reportand the new long-run equilibrium after firms and consumers finish adjusting to the news.109SupplyDemand8SupplyDemand080 160 240 320 400 480 560 640 720 800QUANTITY (Millions of pounds)in the longThe new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry isrun.PRICE (Dollars per pound)320

There are various factors that affect the demand and/or supply of a particular good and/or service.

8. Short-run and long-run effects of a shift in demand Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 400 million pounds per year. Suppo: the Surgeon General issues a report saying that eating turkey is bad for your health. The Surgeon General's report will cause consumers to demand turkey at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the Surgeon General's report. 10 9 Supply 8 PRICE (Dollars per pound) 2 1 0 D2 D. 1 80 160 240 320 400 480 560 640 720 800 QUANTITY (Millions of pounds) 0 In the long run, some firms will respond by 中翼中国 Demand Supply until

8. Short-run and long-run effects of a shift in demand Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 400 million pounds per year. Suppo: the Surgeon General issues a report saying that eating turkey is bad for your health. The Surgeon General's report will cause consumers to demand turkey at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the Surgeon General's report. 10 9 Supply 8 PRICE (Dollars per pound) 2 1 0 D2 D. 1 80 160 240 320 400 480 560 640 720 800 QUANTITY (Millions of pounds) 0 In the long run, some firms will respond by 中翼中国 Demand Supply until

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 6CQQ

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Similar questions

Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
3 The graph below shows the costs and revenue curves for Dollar-Daze, a typical profit-maximizing firm in a perfectly competitive market producing Good X. Answer the following questions based on the graph below d. As the market for Good X moves into the long-run equilibrium, explain what will happen to the price of Good X and why.e. Assume the cross-price elasticity of demand between Good X and Good B is positive, what will happen to the quantity demanded of Good B given the change in the long-run price of Good X in part (d)?
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.
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.
7 A local tavern in a perfectly competitive market was in a long-run equilibrium. Then, a scientific breakthrough determines that beer prevents heart attacks, resulting in an increase in demand for beer. Describe the market processes that affect the tavern in both the short run and the new long-run equilibrium.
2. The gains and loss from selling one more unit Sean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced seven fire engines, but he has decided to increase production to eight fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $100,000 to $50,000 per fire engine. Note that although Sean gains revenue from the additional engine he sells, he also loses revenue from the initial seven engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000.
5. A perfectly competitive firm faces a _______ demand curve for its product. a. vertical b. unit elastic c. inelastic, but not perfectly inelastic d. elastic, but not perfectly elastic e. horizontal The market demand in a competitive market is ______ . a. horizontal b. upward sloping c. vertical d. downward sloping
Hi there. can you please assist on the following question define the following 1. Short -run poeriod 2.Collusion 3. price elasticity of demand
1. The market for manicures and other nail treatments is very competitive. How would the following developments affect the number of nail treatments that a typical nail salon wants to supply in the short run? a. Heightened concern about their appearance causes people to want more manicures at a given price. b. The government requires all nail salons to pay a new yearly licensing fee to operate. c. Worse job prospects elsewhere in the economy cause more people to want to become manicurists, causing the wages of manicurists to fall.
8. In a perfectly competitive market:a. All goods or services in that market are similarb. The price is set by market equilibrium and individual sellers cannotinfluence the pricec. Sellers strive to supply the greatest quantity of the good or service at thelowest priced. Small groups of buyers and sellers can have a great influence on prices