A new korean restaurant opens in a city. People are initially cautious about eating new food items, until an influential health report warns consumers against korean food suggest that they decrease their consumption of Korean foods. As a result, demand for Korean cuisine decreases dramatically. Assuming that the market for Korean food is perfectly competitive, answer the questions below. a. In the story above, what should have happened to the short-run economic loss of the Korean restaurant as a result of the health report? b. Assuming that demand remains low, what do you anticipate will happen to the number of korean restaurants in the city over the long run? c. Would you predict that the first korean restaurant would be able to still running in loss over the long run? Explain your answer. d. Using one graph of the market as a whole and one graph of a representative firm's cost curves, illustrate your answers to parts a - c. (Draw diagram of a, b and c and label your diagram). e. Local steakhouses takes advantage of the negative reviews of Korean food and start incurring economic profits. What will happen to the number of steakhouses in town in the long run? Explain your answer with diagram.
A new korean restaurant opens in a city. People are initially cautious about eating new
food items, until an influential health report warns consumers against korean food
suggest that they decrease their consumption of Korean foods. As a result,
Korean cuisine decreases dramatically.
Assuming that the market for Korean food is
questions below.
a. In the story above, what should have happened to the short-run economic loss of the
Korean restaurant as a result of the health report?
b. Assuming that demand remains low, what do you anticipate will happen to the
number of korean restaurants in the city over the long run?
c. Would you predict that the first korean restaurant would be able to still running in
loss over the long run? Explain your answer.
d. Using one graph of the market as a whole and one graph of a representative firm's
cost
your diagram).
e. Local steakhouses takes advantage of the negative reviews of Korean food and start
incurring economic profits. What will happen to the number of steakhouses in town in
the long run? Explain your answer with diagram.
Step by step
Solved in 2 steps with 4 images
