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 a leading foodie video blogger raises awareness for a scholarly article that links seitan consumption to premature hair loss and unhealthy skin.- The viral video is expected to cause consumers to demand [decrease/increase] seitan at every price. In the short run, firms will respond by [decreasing/increasing] [quantity supplied].Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video.[Graph Description]:The graph displays the supply and demand curves on a grid representing Price (Dollars per pound) on the vertical axis and Quantity (Millions of pounds) on the horizontal axis. The initial equilibrium price is at $5, with a quantity of 50 million pounds. The demand curve slopes downward, and the supply curve slopes upward.[Key Elements]:- The intersection of the initial supply and demand curves is highlighted at the equilibrium point (Price: $5, Quantity: 50 million pounds).- Dotted black lines extend from the equilibrium point to the axes, marking the equilibrium price and quantity.In the long run, some firms will respond by [entering/exiting] the market until [market changes] occur.

This can be described as a form of market in which no single producer or consumer has the power to influence the price or cost in the market, there is a lot of purchaser and buyer available in the market. Government participate in very limited functions of the market.So, the foodie video blogger article claiming that tempeh consumption leads to the loss of hair and unhealthy skin will fall the consumption of tempeh, causing a decrease in D for tempeh in the short run.Hence, the demand curve will shift to the left in the short run.Since there is a decrease in D for tempeh, firms will respond to it by producing less tempeh and incur a loss. Short-run effect:The viral video is expected to cause consumers to D less tempeh at every P. In the short run, firms will react by producing less tempeh and running a loss.In the graph,Show that as the demand for tempeh decreases, the D curve shifts to the left.The equilibrium P of tempeh decreases.The equilibrium Q of tempeh also decreases. As the price decreases, the firms in the industry would incur losses. In the long run, the firms in the tempeh industry will start leaving the industry. As a result, the S of tempeh will fall in the long run and it is depicted by a shift towards the left of the S curve. A shift toward the left of the S curve will increase the P.Firms would continue to exit, the S would continue to fall and the equilibrium price would continue to rise until all the firms again start making zero economic profits.Effect in the Long run:In the l- run, some firms will reract by exiting the industry until each firm in the industry is once again earning zero economic profit. In the graph,Shows that as the S of tempeh decreases, the supply curve shifts to the left.The equilibrium P of tempeh increases.The equilibrium Q of tempeh decreases. The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by producing less tempeh and running a loss.In the long run, some firms will respond by exiting the industry until each firm in the industry is once again earning zero economic profit.

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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 a leading foodie video blogger raises awareness for a scholarly article that links seitan consumption to premature hair loss and unhealthy skin. The viral video 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 viral video.

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 a leading foodie video blogger raises awareness for a scholarly article that links seitan consumption to premature hair loss and unhealthy skin. The viral video 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 viral video.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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