Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 250 million pounds per year.Suppose that WebMD claims that a protein found in chicken will increase your expected lifespan by 5 years.WebMD's claim will cause consumers to demandchicken 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 WebMD's claim.9SupplyDemand8.SupplyDemand10 50100150200250300350400450500QUANTITY (Millions of pounds)103.2.PRICE (Dollars per pound) In the long run, some firms will respond byuntilShift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of WebMD's claim and the new long-run equilibrium after firms and consumers finish adjusting to the news.10SupplyDemand8.7SupplyDemand150100150200250300350400450500QUANTITY (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)

Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 250 million pounds per year. Suppose that WebMD claims that a protein found in chicken will increase your expected lifespan by 5 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 graph to illustrate these short-run effects of WebMD's claim. 10 9. Supply Demand 8 7 Supply Demand 50 100 150 200 250 300 350 400 450 500 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 250 million pounds per year. Suppose that WebMD claims that a protein found in chicken will increase your expected lifespan by 5 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 graph to illustrate these short-run effects of WebMD's claim. 10 9. Supply Demand 8 7 Supply Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pounds) PRICE (Dollars per pound)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 10P

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8. Short-run and long-run effects of a shift in demand Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 200 million cans per year. Suppose the Surgeon General issues a report saying that eating tuna is bad for your health. The Surgeon General’s report will cause consumers to demand ______ tuna 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.
Now suppose that an FDA report announces that coffee is harmful to cardiovascular health. Starting from the diagrams show and discuss with your group how the market will adjust towards a short-run equilibrium and then return to a long-run equilibrium. What happen to the market price and quantity in the short-run? What happens to individual firm output and the number of firms in the short-run? What is the profit in the short-run? What happen to the market price and quantity in the long-run? What happens to individual firm output and the number of firms in the long-run? What is the profit in the long-run? (in reference to: https://www.bartleby.com/questions-and-answers/market-for-coffee-shop-coffee-sarbucks-store-market-for-coffee-shop-coffee-sarbucks-store/0b934604-546c-4b2a-ae02-e65f6f9c2eb2 and https://www.bartleby.com/questions-and-answers/o-baby-fifty-quit-or-x-dessie-summ-g-love-island-season-m-gmail-email-from-h-m-inbox-96-o_folor-x-o-/fb1f7acb-7bb6-46ad-85e6-72aa635db643
Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 200 million cans per year. Suppose the Public Health Agency of Canada (PHAC) issues a report saying that eating tuna is bad for your health. 1st GRAPH: The PHAC's report will cause consumers to demand ____ (less OR more) tuna at every price. In the short run, firms will respond by ______ (exiting the industry OR producing the same amount of tuna and running at a loss OR producing less tuna and running at a loss OR producing more tuna and earning positive profit OR entering the industry OR producing the same amount of tuna and earning positive profits) In the long run, some firms will respond by ______ (producing more tuna and earning positive profit OR producing less tuna and running at a loss OR exiting the industry OR producing less tuna and earning positive profit OR entering the industry OR producing more tuna and running at a loss) until _______ (tuna population…
Short-run and long-run effects of a shift in demand Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 300 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in shrimp is causing bacterial infections to spread around the world. The CDC’s announcement will cause consumers to demand ______ shrimp 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 the CDC’s announcement. (TABLE 1) In the long run, some firms will respond by ______ until _______. (TABLE 2) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is _____ in the long run. Shift the demand curve, the supply curve, or both on the following diagram to illustrate both the short-run effects of the…
Suppose the market for the pain reliever aspirin is in long-run equilibrium at a price of $3 per bottle. New scientific research links aspirin with a reduced risk of heart disease. In the short run, what will happen to the price of aspirin? Explain using a diagram. In the short run, how will firms respond to the change in price described in part 1? What will happen to profits? Explain using the same diagram. Given the situation described in part 2, what can we expect to happen to the number of aspirin producers in the long run? What effect will the change in the number of producers have?
Now suppose that coffee shop coffee is a normal good and income goes up. Starting from the diagram in (1), show and discuss with your group how the market will adjust towards a short-run equilibrium and then return to a long-run equilibrium. What happen to the market price and quantity in the short-run? What happens to individual firm output and the number of firms in the short-run? What is the profit in the short-run? What happen to the market price and quantity in the long-run? What happens to individual firm output and the number of firms in the long-run? What is the profit in the long-run? (in reference to https://www.bartleby.com/questions-and-answers/market-for-coffee-shop-coffee-sarbucks-store-market-for-coffee-shop-coffee-sarbucks-store/0b934604-546c-4b2a-ae02-e65f6f9c2eb2 )
Using the graph answer the following questions: A: At the profit maximizing level of output, what is the firm's total revenue? B: At the profit maximizing quantity, what is the firm's total cost? C: At the profit maximizing quantity, what is the firm's profit? D: Assuming that most firms in the industry have similar costs, describe what happens in this market to bring the industry to a long-run equilibrium (where there are zero profits).
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 .
A company in a competitive market has fixed costs of $200. A total cost curve is given in the table below. Given the data, answer the questions below. Output: 10 20 30 40 50 60 Total Cost:300 420 560 720 900 1100 a. Given the price is $20, what is the profit-maximizing output? What is the profit? b. Given the price is $20, what will happen in the long run? c. At the long-run equilibrium, what will the price be in the long run? What is the profit-maximizing output? What is the profit of the company? d. Prepare marginal cost schedule cost schedule for the firm.
Be sure to label the graphs. Suppose in the competitive market for a good known as “Tovars” that there are 5,000 firms. Assuming each firm is at a point where P=ATC. Suddenly, a huge number of entrepreneurs enters the market so the number of firms increases by 1,000. a. Please draw a graph showing the short run effect. Please label the price and quantities initially as P1, q1, Q1 and the short run price and quantities as P2, q2, Q2 b. On the graph in a, please show the long run effect. Please label the long run price and quantities as P3, q3, Q3. Relative to the initial equilibrium (before the entrance of 1,000 firms), What happens to the P? What happens to the q? What happens to the Q?
Suppose that the perfectly competitive chicken industry is in long-run equilibrium at a price of $3 per pound of chicken and a quantity of 600 million pounds per year. Suppose the Surgeon General issues a report saying that eating chicken is good for your health. The Surgeon General's report will cause consumers to demand chicken at every price. In the short run, firms will respond by . Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's announcement. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. In the long run, some firms will respond by until . Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of the Surgeon General’s announcement and…