Suppose the government imposes an excise tax on the production of a good produced in a perfectly competitive market that was in long run equilibrium. Draw side by side market and firm graphs showing the short run impact on the firm and the market.
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- Suppose the government imposes an excise tax on the production of a good produced in a
perfectly competitive market that was in long run equilibrium. Draw side by side market and firm graphs showing the short run impact on the firm and the market.
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- Choose the one alternative that best that answers the question. Assume the market for organic produce is perfectly competitive. All else being equal, as more farmers choose to produce and sell organic produce, in the long-run, Select one: a. The equilibrium price is likely to increase, and profits are likely to remain unchanged. b. The equilibrium price is likely to remain unchanged, and profits are likely to increase. c. The equilibrium price is likely to decrease, and profits are likely to decrease. d. The equilibrium price is likely to increase, and profits are likely to increase. e. Both the equilibrium price and quantity are likely to remain unchanged.Consider the perfectly competitive market for tofu. Tofu production requires special inspections because of potential allergic reactions in consumers. Starting from long-run equilibrium, show graphically what happens in the short and long run to q. Q, P, and it in the market for tofu (in comparison to the starting point) if the US government decides to impose less stringent inspection requirements before any production can actually start.Suppose that the perfectly competitive tuna Industry is In long-run equilibrium at a price of $3 per can of tuna and a quantity of 600 million cans per year. Suppose the Surgeon General Issues a report saying that eating tuna is bad for your health. The Surgeon General's report will cause consumers to demand Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's announcement. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Supply X Demand 400 600 800 QUANTITY (Millions of cans) 0 0 In the long run, some firms will respond by 5 0 200 0 200 Demand 1000 Shift the supply curve, the demand curve, or both on the following diagram to Illustrate both the short-run effects of the Surgeon General's announcement and the new long-run equilibrium after firms…
- Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 50 45 Profit or Loss 40 35 30 ATC 25 20 AVC 10 MC 0. 4. 10 12 14 16 18 QUANTITY (Thousands of shirts) In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. 20 15 PRICE (Dollars per shirt)The accompanying graphs represent the soy bean market, a competitive market and Roy's Soys, an individual firm in the market for soy beans. The soy bean market graph depicts the short-run supply (SRS), long-run supply (LRS), and demand (D). The graph for Roy's Soys represents marginal consts (MC) and average costgs (AC). The market and the firm are currently in long-run equilibrium at point A. a. Demonstrate what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight-loss supplement. On the market graph, you will shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. b. Now, demonstrate the changes that get both graphs back to long run equilibrium. Use shift(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the green points labeled C. Soy Bean Market Roy's Soys 20 20 Price…Consider the market for solar power. Assume the market is perfectly competitive and initially in long-run equilibrium; solar power sells for $.25 per kwh (kilowatt hour, a unit of power). What happens to the market and the firm in the long run? Indicate clearly what happens to price, quantity, and profit, for each the market and the firm.
- Show what happens in the short run on both graphs when a new medical study shows soybeans to be highly carcinogenic. On the market graph, you will shift a curve or curves. On the firm's graph, use Price 2 to draw a new price line for the firm. On both graphs, indicate the new equilibrium point with point B. Now, show the changes that get both graphs back to long‑run equilibrium. Use shift(s) for the market and Price 3 for the firm. Indicate the new long‑run equilibrium with point C.A Wall Street journal headline states: "a nation of snackers snubs old favorite: the beloved cookie" as u.s. consumers adopted more carbohydrate-conscious diets, the number of cookie boxes sold declined 5.4 percent that year, the third consecutive year of decline. a. Assuming the cookie industry is perfectly competitive demonstrate using market supply and demand curves the effect of this decline in demand on equilibrium price and quantity in the short run. b. Assuming a cookie form was in equilibrium before the change in demand, and it is a constant-cost industry, demonstrate the effect of the decline in equilibrium price for an individual cookie firm in the short run. c. How might your answer to question "a" if you are considering long run?Please graph what the market looks like with a short decrease in demand and what one firm looks like with a short run decrease in demand. Please make sure to graph your answer with all necessary labeling.
- Suppose that the market for air fresheners is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 40 36 Profit or Loss 32 28 ATC AVC MC 4 2 4 6 10 12 14 16 18 20 QUANTITY (Thousands of air fresheners per day) In the short run, at a market price of $20 per air freshener, this firm will choose to produce v air fresheners per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's v would be $ thousand per day in the short run. PRICE (Dollars per air freshener)Will, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive. The first chart shows how much each farmer produces at different price levels. The second chart shows each farmer's minimum average total cost (ATC), average variable cost (AVC), and marginal cost (MC). Based on this data (assuming these three are the only producers), answer the questions that follow. Short-run quantity supplied Price Will Jill Phil $2.00 4 2 0 $4.00 6 4 2 $6.00 9 5 4 $8.00 12 8 6 Firm a. What is the cause of the divergence in the short-run Minimum ATC and long-run supply curves? Minimum AVC Minimum MC $1.00 $2.00 Will Jill Phil $2.50 $5.00 $7.00 $2.50 $0.50 $1.00 $2.00 government regulation changes in the market differing individual cost structures b. Suppose that the market price dips to $2.25 in the short run before ultimately settling at $2.50 per bushel. Who exits immediately, and who exits in the long-run when costs are no longer fixed? Phil exits immediately, Jill…The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The graph titled Roy's Soys depicts an individual firm in the market for soy beans. The market and the firm are currently in long-run equilibrium at Point A. Show what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight-loss supplement. On the market graph, shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. Now, show the changes that get both graphs back to long-run equilibrium. Shift the appropriate curve(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the points labeled C.
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