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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4. For each of the following production functions, write the equation and graph the supply curve of the firm if w=20 and r=50 When the price of output is $20, how much will the firm offer to the market and what are the profits of the firm? a. Q = 10 K^.2L^.5B^.1 in the long-run with capital flexible. B is the amount of Building Space employed, which is held fixed at 1 unit in both the long-run and the short-run and has a price of $100 per unit. b. Q= (4K^.6 + 8L^.6)^ 1.25
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Assume the natural gas industry is still living with the short-run supply disruption. Then, unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas. graphically depict any changes affecting the market for natural gas and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC curves. market price is always greater than the minimum of the AVC curve.
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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 ?
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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.
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