8. Short-run and long-run effects of a shift in demand Suppose that the perfectly competitive tuna industry is in long-run equilibrium at a price of $3 per can of tuna and a quantity of 600 million cans per year. Suppose the Surgeon General issues a report saying that eating tuna is good for your health. The Surgeon General's report will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's announcement. 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 can Supply 5 Demand 0 0 200 400 600 800 Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) In the long run, some firms will respond by Supply until new technologies are discovered that lower costs tuna populations grow large enough to support more firms each firm in the industry is once again earning zero economic profit consumer demand returns to its original level ram to illustrate both the short-run effects of the Surgeon General's mers finish adjusting to the Surgeon General's announcement. PRICE (Dollars pe 0 3 0 200 400 600 800 Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) In the long run, some firms will respond by until Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of the Surgeon General's announcement and the new long-run equilibrium after firms and consumers finish adjusting to the Surgeon General's announcement. PRICE (Dollars per can) 0 200 400 600 800 Supply Demand Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) Supply
8. Short-run and long-run effects of a shift in demand Suppose that the perfectly competitive tuna industry is in long-run equilibrium at a price of $3 per can of tuna and a quantity of 600 million cans per year. Suppose the Surgeon General issues a report saying that eating tuna is good for your health. The Surgeon General's report will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's announcement. 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 can Supply 5 Demand 0 0 200 400 600 800 Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) In the long run, some firms will respond by Supply until new technologies are discovered that lower costs tuna populations grow large enough to support more firms each firm in the industry is once again earning zero economic profit consumer demand returns to its original level ram to illustrate both the short-run effects of the Surgeon General's mers finish adjusting to the Surgeon General's announcement. PRICE (Dollars pe 0 3 0 200 400 600 800 Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) In the long run, some firms will respond by until Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of the Surgeon General's announcement and the new long-run equilibrium after firms and consumers finish adjusting to the Surgeon General's announcement. PRICE (Dollars per can) 0 200 400 600 800 Supply Demand Demand 1000 1200 QUANTITY OF OUTPUT (Millions of cans) Supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:8. Short-run and long-run effects of a shift in demand
Suppose that the perfectly competitive tuna industry is in long-run equilibrium at a price of $3 per can of tuna and a quantity of 600 million cans per
year. Suppose the Surgeon General issues a report saying that eating tuna is good for your health.
The Surgeon General's report will cause consumers to demand
tuna at every price. In the short run, firms will respond by
Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's
announcement.
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 can
Supply
5
Demand
0
0
200
400
600
800
Demand
1000
1200
QUANTITY OF OUTPUT (Millions of cans)
In the long run, some firms will respond by
Supply
until
new technologies are discovered that lower costs
tuna populations grow large enough to support more firms
each firm in the industry is once again earning zero economic profit
consumer demand returns to its original level
ram to illustrate both the short-run effects of the Surgeon General's
mers finish adjusting to the Surgeon General's announcement.
Transcribed Image Text:PRICE (Dollars pe
0
3
0
200
400
600
800
Demand
1000
1200
QUANTITY OF OUTPUT (Millions of cans)
In the long run, some firms will respond by
until
Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of the Surgeon General's
announcement and the new long-run equilibrium after firms and consumers finish adjusting to the Surgeon General's announcement.
PRICE (Dollars per can)
0
200
400
600
800
Supply
Demand
Demand
1000
1200
QUANTITY OF OUTPUT (Millions of cans)
Supply
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