The image displays a supply and demand graph with axes labeled "PRICE (Dollars per pound)" on the vertical and "QUANTITY (Millions of pounds)" on the horizontal. The following curves are shown:- **Demand Curve (D₁):** A blue line sloping downward from a price of $8 at 0 quantity to $0 at 100 million pounds. - **New Demand Curve (D₂):** A lighter blue dashed line parallel to D₁ but at a lower position, indicating a shift in demand. - **Supply Curve (S₁):** A gray line sloping upward starting from the origin, passing through $5 at 50 million pounds. - **New Supply Curve (S₂):** An orange line sloping upward, starting at a lower price and quantity, crossing the new demand curve D₂ at the same point as the original curves did.The graph includes a legend with squares labeling "Demand" and circles labeling "Supply." The initial equilibrium is marked by dashed lines intersecting at a quantity of 50 million pounds and a price of $4.**Explanation:**The graph illustrates shifts in both demand and supply. The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is **downward sloping** in the long run.

The equilibrium is obtained where Demand and Supply curve intersect each other.

10 S, Demand 7 Supply D, 1 D. 10 20 30 40 50 60 70 80 06 100 QUANTITY (Millions of pounds) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is downward sloping in the long run. PRICE (Dollars per pound)

10 S, Demand 7 Supply D, 1 D. 10 20 30 40 50 60 70 80 06 100 QUANTITY (Millions of pounds) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is downward sloping in the long run. PRICE (Dollars per pound)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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