7. The long-run supply curve in different cost industries The following graph shows the market for orange juice. Initially, the market is in a long-run equilibrium. Suppose that a change in tastes resulted in a rightward shift in demand. On the following graph, shift the demand or supply curve to reflect this change in tastes. Then use the grey point (star symbol) to indicate the new short-run equilibrium. 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. PRICE (Dollars per quart) 6 0 0 2 6 Short-run Supply Demand QUANTITY (Thousands of quarts) 8 O Demand 101 Short-run Supply 4 Short-run Equilibrium 9 Long-run Equilibrium A Long-run Supply

7. The long-run supply curve in different cost industries The following graph shows the market for orange juice. Initially, the market is in a long-run equilibrium. Suppose that a change in tastes resulted in a rightward shift in demand. On the following graph, shift the demand or supply curve to reflect this change in tastes. Then use the grey point (star symbol) to indicate the new short-run equilibrium. 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. PRICE (Dollars per quart) 6 0 0 2 6 Short-run Supply Demand QUANTITY (Thousands of quarts) 8 O Demand 101 Short-run Supply 4 Short-run Equilibrium 9 Long-run Equilibrium A Long-run Supply

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 75 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links jackfruit consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video. PRICE (Dollars per pound) 10 9 8 7 co 01 2 1 0 0 15 Supply Demand jackfruit at every price. In the short run, firms will respond by 30 45 60 75 90 105 120 135 150 QUANTITY (Millions of pounds) Demand Supply ?
Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 500 million cans per year. Suppose that WebMD claims that the bacteria found in tuna will decrease your expected lifespan by 2 years. WebMD's claim will cause consumers to demand Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of WebMD's claim. ? PRICE (Dollars per can) 10 9 8 0 O tuna at every price. In the short run, firms will respond by 100 200 Supply Demand 300 400 500 600 700 800 QUANTITY (Millions of cans) 000 1000 Demand 1 Supply
Consider what happens in the long run when demand falls in a constant cost industry. For instance, think about the market for pizza in a small city after the city's biggest textile mill shuts down. The accompanying graph begins in a long-run equilibrium. Move the appropriate curve or curves on the graph to illustrate the fall in demand and the resulting change that returns the market to long-run equilibrium. Finally, move point E to the new equilibrium position. Price of pizza Market for Pizza E Also, answer the following questions about the market's response to this fall in demand. a. The marginal cost of production is lowest at the short-run equilibrium b. When firms cut prices, they often do so in dramatic ways. The local pizza shops are most likely to offer "Buy one, get one free" in the short-run equilibrium c. The market price is less than the firm's average cost of production in the .The market price is equal to the average cost of production in the d. Restating the previous…
9. The long-run supply curve in different cost industries The following graph shows the market for milk. Initially, the market is in a long-run equilibrium. Suppose that a change in tastes resulted in a leftward shift in demand. On the following graph, shift the demand or supply curve to reflect this change in tastes. Then use the grey point (star symbol) to indicate the new short-run equilibrium. 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. PRICE (Dollars per gallon) Short-run Supply Demand Short-run Supply Short-run Equilibrium Demand Long-run Equilibrium 0 2 10 Long-run Supply QUANTITY (Thousands of gallons) In the short run, firms will . In the long run, the supply curve will On the previous graph, show the shift in the supply curve and then use the purple point (diamond symbol) to indicate the resulting new long- run…
4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
Operation management
pshotic 166& 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) Σ 50 PRICE (Dollars per oven)
Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 150 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 graph to illustrate these short-run effects of the CDC's announcement. 10 9. Supply Demand 7 Supply 4 3 Demand 2 1 30 60 90 120 150 180 210 240 270 300 QUANTITY (Millions of cans) PRICE (Dollars per can)
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. 9 Supply Demand 8. Supply Demand 1 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pounds) 10 3. 2. PRICE (Dollars per pound)
The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The graph titled Roy's Soys depicts an individual firm in the market for soy beans. The market and the firm are currently in long-run equilibrium at Point A. Show what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight-loss supplement. On the market graph, shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. Now, show the changes that get both graphs back to long-run equilibrium. Shift the appropriate curve(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the points labeled C.