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 theworld.shrimp at every price. In the short run, firms will respond byThe CDC's announcement will cause consumers to demandShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the CDC's announcement.10SupplyDemandSupply5Demand2160120180240300360420480540600QUANTITY (Millions of pounds)In the long run, some firms will respond byuntilPRICE (Dollars per pound) Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the CDC's announcement and thenew long-run equilibrium after firms and consumers finish adjusting to the news.10SupplyDemandSupplyDemand2160120180240300360420480540600QUANTITY (Millions of pounds)The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry isin the longrun.PRICE (Dollars per pound)

Given; Equilibrium price of shrimp= $5 Equilibrium quantity of shrimp= 300 million pound Centre of…

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 aroundt world. The COC'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 graph to illustrate these short-run effects of the CDC's announcement. 10 Supply Demand Supply Demand 60 120 180 240 300 360 420 540 600 QUANTITY (Millions of pounds) In the long run, some firms will respond by until PRICE (Dollars per pound)

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 aroundt world. The COC'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 graph to illustrate these short-run effects of the CDC's announcement. 10 Supply Demand Supply Demand 60 120 180 240 300 360 420 540 600 QUANTITY (Millions of pounds) In the long run, some firms will respond by until PRICE (Dollars per pound)

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 5CQ

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