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. 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. 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.
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. 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. 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.
Chapter1: Introducing The Economic Way Of Thinking
Section: Chapter Questions
Problem 7SQ
Related questions
Question
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.
- 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.
- 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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
