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Suppose that the perfectly competitive shrimp industry is in long-run equilibrium at a price of $3 per kilogram of shrimp and a quantity of 600 million kilograms per year. Suppose Health Canada issues a report saying that eating shrimp is bad for your health.

Suppose that the perfectly competitive shrimp industry is in long-run equilibrium at a price of $3 per kilogram of shrimp and a quantity of 600 million kilograms per year. Suppose Health Canada issues a report saying that eating shrimp is bad for your health.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the perfectly competitive shrimp industry is in long-run equilibrium at a price of $3 per kilogram of shrimp and a quantity of 600 million kilograms per year. Suppose Health Canada issues a report saying that eating shrimp is bad for your health.

Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of Health Canada's announcement and the new long-run equilibrium after firms and consumers finish adjusting to Health Canada's announcement. Supply 5 Demand Supply Demand 1 200 400 600 800 1000 1200 QUANTITY (Millions of kilograms) Assuming the long-run price and quantity are as you found in the preceding problem, the shrimp industry is PRICE (Dollars per kilogram)
Transcribed Image Text:Shift the supply curve, the demand curve, or both on the following diagram to illustrate both the short-run effects of Health Canada's announcement and the new long-run equilibrium after firms and consumers finish adjusting to Health Canada's announcement. Supply 5 Demand Supply Demand 1 200 400 600 800 1000 1200 QUANTITY (Millions of kilograms) Assuming the long-run price and quantity are as you found in the preceding problem, the shrimp industry is PRICE (Dollars per kilogram)
Suppose that the perfectly competitive shrimp industry is in long-run equilibrium at a price of $3 per kilogram of shrimp and a quantity of 600 million kilograms per year. Suppose Health Canada issues a report saying that eating shrimp is bad for your health. Health Canada's report will cause consumers to demand more shrimp at every price. In the short run, firms will respond by Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of Health Canada's announcement. 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. Supply Demand Supply Demand 200 400 600 800 1000 1200 QUANTITY (Millions of kilograms) In the long run, some firms will respond by until PRICE (Dollars per kilogram)
Transcribed Image Text:Suppose that the perfectly competitive shrimp industry is in long-run equilibrium at a price of $3 per kilogram of shrimp and a quantity of 600 million kilograms per year. Suppose Health Canada issues a report saying that eating shrimp is bad for your health. Health Canada's report will cause consumers to demand more shrimp at every price. In the short run, firms will respond by Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of Health Canada's announcement. 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. Supply Demand Supply Demand 200 400 600 800 1000 1200 QUANTITY (Millions of kilograms) In the long run, some firms will respond by until PRICE (Dollars per kilogram)
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