8. Short-run and long-run effects of a shift in demandSuppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity450 million pounds per year. Supposethat the Centers for Disease Control (CDC) announces that a chemical found in turkey is causing bacterial infections to spread around the world.The CDC's announcement will cause consumers to demandturkey at every price. In the short run, firms will respond byShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the CDC's announcement.109SupplyDemand8SupplyDemand154063072081090018027036045090QUANTITY (Millions of pounds)PRICE (Dollars per pound) In the long run, some firms will respond byuntilShift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the CDC's announcement and thenew long-run equilibrium after firms and consumers finish adjusting to the news.109.Supply8Demand7SupplyDemand190180270360450540630720810900QUANTITY (Millions of pounds)in the longThe new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry isrun.PRICE (Dollars per pound)

A shift in demand refers to a change in the quantity of a good or service that consumers are willing…

8. Short-run and long-run effects of a shift in demand Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 450 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in turkey is causing bacterial infections to spread around the world. The CDC's announcement will cause consumers to demand turkey 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.

8. Short-run and long-run effects of a shift in demand Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 450 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in turkey is causing bacterial infections to spread around the world. The CDC's announcement will cause consumers to demand turkey 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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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