Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 400 million pounds per year. Suppose that WebMD claims that the bacteria found in chicken will decrease your expected life span by 2 years. WebMD's claim will cause consumers to demand chicken at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of WebMD's claim. 10 9 Supply Demand 8 7 Supply Demand 1 80 160 240 320 400 480 560 640 720 800 QUANTITY (Millions of pounds) PRICE (Dollars per pound)

Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 400 million pounds per year. Suppose that WebMD claims that the bacteria found in chicken will decrease your expected life span by 2 years. WebMD's claim will cause consumers to demand chicken at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of WebMD's claim. 10 9 Supply Demand 8 7 Supply Demand 1 80 160 240 320 400 480 560 640 720 800 QUANTITY (Millions of pounds) PRICE (Dollars per pound)

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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