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 100 millionpounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase yourexpected lifespan by 5 years.The publication is expected to cause consumers to demand jackfruit 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 publication.PRICE (Dollars per pound)1098765-run effects of a shift in demand200 2040SupplyDemand6080 100 120 140QUANTITY (Millions of pounds)160 180200ODemandSupply?t. 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 100 millionpounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase yourexpected lifespan by 5 years.The publication is expected to cause consumers to demand jackfruit 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 publication.PRICE (Dollars per pound)1098765-run effects of a shift in demand200 2040SupplyDemand6080 100 120 140QUANTITY (Millions of pounds)160 180200ODemandSupply?t.

An efficient consumption level provides maximum satisfaction from economic activities. At this point, demand is equal to the supply level. As given in the case, the publication would lead to an increase in the demand for jackfruit by consumers. As a result, the demand curve would shift rightwards. The firms increase the price level of jackfruit to meet the increasing demand. An increase in demand is represented by a rightward shift in the demand curve. The firms will offer an increasing price to consumers. In the long run, some firms can increase the supply of jackfruit until it becomes equal to the quantity demanded. The graph for long-run is given below: In the above graph, in the long run, the supply by the firm is increased which further leads to a shift in the equilibrium level to point A. Here, the price level is back to the original cost. According to the new equilibrium, the quantity sold is upward-sloping. The consumers will increase the demand for jackfruit and the firms in the short-run would increase the price level with a higher level of production. In the long-run, some firms will respond by increasing the supply of fruit until the demand equals supply.

Business

Economics

In the long run, some firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long- run equilibrium after firms and consumers finish adjusting to the news. PRICE (Dollars per pound) 10 9 8 7 2 1 0 10 26 Supply 1 Demand 20 40 60 80 100 120 140 160 180 200 QUANTITY (Millions of pounds) Demand 11 Supply until The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is run. upward sloping downward sloping vertical horizontal upward sloping in the long

In the long run, some firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long- run equilibrium after firms and consumers finish adjusting to the news. PRICE (Dollars per pound) 10 9 8 7 2 1 0 10 26 Supply 1 Demand 20 40 60 80 100 120 140 160 180 200 QUANTITY (Millions of pounds) Demand 11 Supply until The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is run. upward sloping downward sloping vertical horizontal upward sloping in the long

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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