Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 250 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. 10 9 Supply Demand 8 7 Supply Demand 2 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)

Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 250 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. 10 9 Supply Demand 8 7 Supply Demand 2 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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