Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per block of tofu and quantity of 225 million blocks per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in tofu are linked to chronic illness. The FDA's research is expected to cause consumers to demand the short run, firms will respond by tofu at every price. In 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 block) 0 Supply Demand Demand 45 90 135 180 225 270 315 360 405 450 QUANTITY (Millions of blocks) In the long run, some firms will respond by 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. PRICE (Dollars per block) Supply Demand Demand 45 90 135 180 225 270 315 360 405 450 QUANTITY (Millions of blocks) }]} Supply
Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per block of tofu and quantity of 225 million blocks per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in tofu are linked to chronic illness. The FDA's research is expected to cause consumers to demand the short run, firms will respond by tofu at every price. In 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 block) 0 Supply Demand Demand 45 90 135 180 225 270 315 360 405 450 QUANTITY (Millions of blocks) In the long run, some firms will respond by 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. PRICE (Dollars per block) Supply Demand Demand 45 90 135 180 225 270 315 360 405 450 QUANTITY (Millions of blocks) }]} Supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per
block of tofu and quantity of 225 million blocks per year. Suppose that the Food and Drug
Administration (FDA) reports that compounds naturally occurring in tofu are linked to chronic
illness.
The FDA's research is expected to cause consumers to demand
the short run, firms will respond
by
tofu at every price. In
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 block)
0
Supply
Demand
Demand
45 90 135 180 225 270 315 360 405 450
QUANTITY (Millions of blocks)
In the long run, some firms will respond
by
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.
PRICE (Dollars per block)
Supply
Demand
Demand
45 90
135
180 225
270 315
360 405
450
QUANTITY (Millions of blocks)
}]}
Supply](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32973613-eba3-44fb-9613-24c76949a18d%2F2291ad7b-f723-42b9-8b53-9c07c2049752%2Fe1odrl_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per
block of tofu and quantity of 225 million blocks per year. Suppose that the Food and Drug
Administration (FDA) reports that compounds naturally occurring in tofu are linked to chronic
illness.
The FDA's research is expected to cause consumers to demand
the short run, firms will respond
by
tofu at every price. In
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 block)
0
Supply
Demand
Demand
45 90 135 180 225 270 315 360 405 450
QUANTITY (Millions of blocks)
In the long run, some firms will respond
by
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.
PRICE (Dollars per block)
Supply
Demand
Demand
45 90
135
180 225
270 315
360 405
450
QUANTITY (Millions of blocks)
}]}
Supply
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