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 200 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 by seitan at every price. In the short run, firms will respond Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the FDA's research. (?)
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 200 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 by seitan at every price. In the short run, firms will respond Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the FDA's research. (?)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:pols
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In the long run, some firms will respond
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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 ne
long-run equilibrium after firms and consumers finish adjusting to the news.
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PRICE (Dollars per pound)
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Supply
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Demand
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QUANTITY (Millions of pounds)
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Transcribed Image Text:er
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 200 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
by
PRICE (Dollars per pound)
Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the FDA's research.
10
9
8
7
6
5
3
2
1
0
0
40
80
NOV
3
120
160
1
2
Supply
240
200
Demand
280
320
360 400
seitan at every price. In the short run, firms will respond
tv
Demand
Supply
(?)
ST
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