Short-run and long-run effects of a shift in demand uppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 50 million pounds per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in seitan are nked to chronic illness. the FDA's research is expected to cause consumers to demand seitan at every price. In the short run, firms will respond У hift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the FDA's research. PRICE (Dollars per pod 1 0 a 20 the long run, some firms will respond У Supply 80 ТО QUANTITY (Mons of pounds) hift the demand sunce the supply un Demand 100 Demand Supply until bath on the following aranh bn illustrate both the chartmunffate of the FDA

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8. Short-run and long-run effects of a shift in demand
Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 50
million pounds per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in seitan are
linked to chronic illness.
The FDA's research is expected to cause consumers to demand seitan 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 FDA's research.
PRICE (Dollars per pod
0
10
20
Supply
In the long run, some firms will respond
by
Demand
TO
QUANTITY (Mons of pounds)
20 100
Demand
Supply
until
Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the FDA's research
and the new long-run equilibrium after firms and consumers finish adjusting to the news.
Transcribed Image Text:8. Short-run and long-run effects of a shift in demand Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 50 million pounds per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in seitan are linked to chronic illness. The FDA's research is expected to cause consumers to demand seitan 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 FDA's research. PRICE (Dollars per pod 0 10 20 Supply In the long run, some firms will respond by Demand TO QUANTITY (Mons of pounds) 20 100 Demand Supply until Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the FDA's research and the new long-run equilibrium after firms and consumers finish adjusting to the news.
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 FDA's research
and the new long-run equilibrium after firms and consumers finish adjusting to the news.
PRICE (Dollars per pod
1
0
a
20
Supply
Demand
20
50 80 TO
QUANTITY (Millions of pounds)
80
until
20 100
Demand
Supply
The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is
the long run.
Transcribed Image Text: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 FDA's research and the new long-run equilibrium after firms and consumers finish adjusting to the news. PRICE (Dollars per pod 1 0 a 20 Supply Demand 20 50 80 TO QUANTITY (Millions of pounds) 80 until 20 100 Demand Supply The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is the long run.
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