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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 350 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 less producing the same amount of turkey and running at a loss Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. PRICE (Dollars per pound) 10 9 8 1 1 Supply turkey at every price. In the short run, firms will respond by Demand Demand Supply ?

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 350 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 less producing the same amount of turkey and running at a loss Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. PRICE (Dollars per pound) 10 9 8 1 1 Supply turkey at every price. In the short run, firms will respond by Demand Demand Supply ?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...
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In the long run, some firms will respond by each firm in the industry is once again earning zero profit PRICE (Dollars per pound) Shift the demand curve, the supply curve, or both on the following diagram to illustrate both the short-run effects of the CDC's announcement and the new long-run equilibrium after firms and consumers finish adjusting to the news. 10 run. 9 8 2 1 0 0 70 exiting the industry Supply Demand 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of pounds) þ þ Demand until Supply The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is horizontal in the long
Transcribed Image Text:In the long run, some firms will respond by each firm in the industry is once again earning zero profit PRICE (Dollars per pound) Shift the demand curve, the supply curve, or both on the following diagram to illustrate both the short-run effects of the CDC's announcement and the new long-run equilibrium after firms and consumers finish adjusting to the news. 10 run. 9 8 2 1 0 0 70 exiting the industry Supply Demand 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of pounds) þ þ Demand until Supply The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is horizontal in the long
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 350 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 less producing the same amount of turkey and running at a loss Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. PRICE (Dollars per pound) 10 9 8 7 6 3 2 1 0 0 Supply Demand turkey at every price. In the short run, firms will respond by 70 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of pounds) Demand Supply
Transcribed Image Text: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 350 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 less producing the same amount of turkey and running at a loss Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. PRICE (Dollars per pound) 10 9 8 7 6 3 2 1 0 0 Supply Demand turkey at every price. In the short run, firms will respond by 70 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of pounds) Demand Supply
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