Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 250 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement 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 diagram to illustrate these short-run effects of the CDC's announcement. 10 9 Supply Demand 8 7 Supply Demand 2 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)

Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 250 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement 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 diagram to illustrate these short-run effects of the CDC's announcement. 10 9 Supply Demand 8 7 Supply Demand 2 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)

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 8CQ

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Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 150 million pounds per year. Suppose the Surgeon General issues a report saying that eating shrimp is bad for your health. The Surgeon General’s report 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 Surgeon General’s report. In the long run, some firms will respond by until . Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the Surgeon General’s report and the new long-run equilibrium after firms and consumers finish adjusting to the news. The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run.
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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…
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