Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 100 million. pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by producing the same amount of tempeh and running at a loss. Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video. (?) 10 9 4 2 1 0 0 20 Supply In the long run, some firms will respond by D₁ 40 60 80 100 120 140 100 100 200 QUANTITY (Millions of pounds) consumer demand returns to its original level 10 Demand Supply exiting the industry until The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond br by producing the same amount of tempeh and running at a loss producing more tempeh and earning positive profit producing the same amount of tempeh and earning positive profit producing less tempeh and running at a loss. exiting the industry entering the industry producing the same amount of tempeh and running at a loss □ Q Q In the long run, some firms will respond by consumer demand returns to it Demand Screen Shot 2023-02-21 at 2.18.23 PM 10 .. I✓QQ Û an une rong run, ses will responu by aph to illustrate these short-run effects of the viral video. producing more tempeh and running at a loss entering the industry Shift the demand curve, the supply curve, or run equilibrium after firms and consumers fir producing less tempeh and earning positive profit exiting the industry exiting the industry consumer demand returns to its original level Screen Shot 2023-02-21 at 2.18.29 PM producing less tempeh and running at a loss producing more tempeh and earning positive profit (? tempeh populations grow large enough to support more firms new technologies are discovered that lower costs consumer demand returns to its original level. each firm in the industry is once again earning zero profit Q Search Q Search exiung une muustry 9 graph to illustrate both the sho news. (?) rt-run effects of until O

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8. Short-run and long-run effects of a shift in demand
Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 100 million
pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to premature hair loss
and unhealthy skin.
The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by
producing the same amount of tempeh and running at a loss
Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video.
PRICE (Dollars per pound)
10
9
8
1
0
0
20
Supply
40 60 80 100 120 140
QUANTITY (Millions of pounds)
In the long run, some firms will respond by
D.
D₂
160 180 200
consumer demand returns to its original level
Demand
Supply
(?)
exiting the industry
until
and unhealthy skin.
The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by
producing the same amount of tempeh and running at a loss
producing the same amount of tempeh and earning positive profit
producing less tempeh and running at a loss
producing more tempeh and earning positive profit
OOO
entering the industry
producing the same amount of tempeh and running at a loss
exiting the industry
10
Q
1
In the long run, some firms will respond by
consumer demand returns to it
Q
Demand
Screen Shot 2023-02-21 at 2.18.23 PM ✓
Ô @
aph to illustrate these short-run effects of the viral video.
in the long run, some nimis will responu by
entering the industry
Shift the demand curve, the supply curve, or
run equilibrium after firms and consumers fir producing less tempeh and earning positive profit
exiting the industry
exiting the industry
producing more tempeh and running at a loss
(?)
Screen Shot 2023-02-21 at 2.18.29 PM ✓
consumer demand returns to its original level
producing less tempeh and running at a loss
producing more tempeh and earning positive profit
Q Search
tempeh populations grow large enough to support more firms
new technologies are discovered that lower costs
consumer demand returns to its original level
each firm in the industry is once again earning zero profit
Q Search
exiting the industry
g graph to illustrate both the sho
news.
(?)
until
rt-run effects of
Transcribed Image Text:8. Short-run and long-run effects of a shift in demand Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 100 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by producing the same amount of tempeh and running at a loss Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the viral video. PRICE (Dollars per pound) 10 9 8 1 0 0 20 Supply 40 60 80 100 120 140 QUANTITY (Millions of pounds) In the long run, some firms will respond by D. D₂ 160 180 200 consumer demand returns to its original level Demand Supply (?) exiting the industry until and unhealthy skin. The viral video is expected to cause consumers to demand less tempeh at every price. In the short run, firms will respond by producing the same amount of tempeh and running at a loss producing the same amount of tempeh and earning positive profit producing less tempeh and running at a loss producing more tempeh and earning positive profit OOO entering the industry producing the same amount of tempeh and running at a loss exiting the industry 10 Q 1 In the long run, some firms will respond by consumer demand returns to it Q Demand Screen Shot 2023-02-21 at 2.18.23 PM ✓ Ô @ aph to illustrate these short-run effects of the viral video. in the long run, some nimis will responu by entering the industry Shift the demand curve, the supply curve, or run equilibrium after firms and consumers fir producing less tempeh and earning positive profit exiting the industry exiting the industry producing more tempeh and running at a loss (?) Screen Shot 2023-02-21 at 2.18.29 PM ✓ consumer demand returns to its original level producing less tempeh and running at a loss producing more tempeh and earning positive profit Q Search tempeh populations grow large enough to support more firms new technologies are discovered that lower costs consumer demand returns to its original level each firm in the industry is once again earning zero profit Q Search exiting the industry g graph to illustrate both the sho news. (?) until rt-run effects of
Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the viral video and the new long-
run equilibrium after firms and consumers finish adjusting to the news.
PRICE (Dollars per pound)
10
9
8
7
4
3
2
1
0
0
20
I
40 60
80 100 120 140
QUANTITY (Millions of pounds)
S
$₂
S.
1
D₁
1
12
160 180 200
Demand
Supply
(?)
The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is
run.
horizontal
▼in the long
Transcribed Image Text:Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the viral video and the new long- run equilibrium after firms and consumers finish adjusting to the news. PRICE (Dollars per pound) 10 9 8 7 4 3 2 1 0 0 20 I 40 60 80 100 120 140 QUANTITY (Millions of pounds) S $₂ S. 1 D₁ 1 12 160 180 200 Demand Supply (?) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is run. horizontal ▼in the long
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