8. 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 250 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 graph to illustrate these short-run effects of the CDC's announcement. (? 10 Supply 8 Demand Supply Demand 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pounds) PRICE (Dollars per pound)

8. 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 250 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 graph to illustrate these short-run effects of the CDC's announcement. (? 10 Supply 8 Demand Supply Demand 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of pounds) PRICE (Dollars per pound)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

am. 79.
Assume there are 200 million television sets in the US and one quarter are replaced annually. Also 5 million households are formed annually each on the average purchase 2 televisions. Calculate the market demand for TV sets. 10M 60M 80M 50M 100M
Majority of snow crab consumed in the U.S. comes from Alaska. What immediate impact would the closure of the Alaska snow crab fishery (described in the article several questions above) have on the market for stone crab, the majority of which comes from Florida? A. Positive demand shock in the market for stone crab B. Negative demand shock in the market for stone crab C. Positive supply shock in the market for stone crab D. Negative supply shock in the market for stone crab What determinant of demand or determinant of supply caused the shock you identified in the question above? Explain in 2 - 3 sentences integrating TWO relevant economic concepts.
Question 1: Hotelling’s Rule in a rapidly changing market Let’s assume that oil was not discovered until the year 1999. The New York Times writes that“a source of energy with potential disruptive effects on the world economy” is now ready forproduction, and “other countries are watching the developments closely”.Along with many other producers, you own a small oil well. The market is very competitive. Themarginal extraction cost is $10 per barrel. The interest rate is 5%. The annual demand for oil isQ = 90,000 – 2,000P where Q is in barrels per year and P is in dollars per barrel.Use your knowledge about Hotelling’s Rule to answer the following questions: Oil is trading for $25/bbl on Jan 1st, 1999. What do you expect the path of oil pricesand extraction quantities to be from 1999-2010 (assuming no shocks to the market)?A day later, on Jan 2nd, 1999, the Wall Street Journal opens with a story that there is now amore reliable reserves estimate. Total reserves are estimated at 760,000…
Suppose that price of steel, a major input for making cars, increased. Using two separate competitive supply/demand diagrams for cars market, and gas market, illustrate and briefly explain the probable effects of the increase in the price of steel on: equilibrium price, and equilibrium quantities, in the cars and gas markets. What happen to the revenues of car, and gas producers/sellers? [Hint: Car and gas are complements. First show how an increase in price of steel will affect the car market. Then based on what happens to car prices, determine what will happen to the gas market] U X2 x2 E E A- I X 山T國 étv MacBook Pro
Figure 3-9 15 藤藤文 QMoonshine (1) Q Moonshine Q Moonshine (2) (3) Q Moonshine (4) 2. "Moonshine" is illegal home brew made by adding sugar to accelerate corn fermentation. Ten pounds of sugar are necessary to make a gallon of moonshine. In the mid-1970s, the price of sugar tripled and the price of moonshine skyrocketed from S6 to $15 a gallon. Which graph in Figure 3-9 best illustrates this? a.l b. 2 c. 3 d. 4
13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that new medical concerns regarding graphite absorption have put pressure on schools to reduce pencil use in favor of pens. Further, the price of ink, a major input in the pen production process, has increased sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. 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. PRCE (Dolars per pen) 1 2 Scenario 1 Demand 3 5 0 7 QUANTITY (Millions of pens) Demand 16 Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph.
5. In the short run, the general view of the relationship between housing supply and the price of housing is that the stock of housing is essentially fixed and the supply of housing is very inelastic. This implies that in the short run, the price of housing will be determined by................. while the quantity of housing will be determined by............... (1) demand conditions, supply conditions (2) supply conditions, economic conditions (3) income conditions, demand conditions: (4) market price, supply conditions
F3.
1-8 please