The first sushi restaurant opens in a town. (Sushi is a type of food popularized in Japan. It consists of cooked rice combined with raw fish or other seafood.) People in this town have always liked large portions of grilled meat such as steak, so initially they are reluctant to try a restaurant that serves tiny portions of raw fish. Soon, however, an influential health report warns of the dangers of eating grilled meat and suggests that people should eat more fish, especially raw fish. Now think about the market for steak in this town. Explain the effect of this health report on the market for steak in this town in the short run. Specifically, explain what happens to the price of steak, the number of steak restaurants, and the profits of steak restaurants. Explain the effect of this health report on the market for steak in this town in the long run. Specifically, explain what happens to the price of steak, the number of steak restaurants, and the profits of steak restaurants.
The first sushi restaurant opens in a town. (Sushi is a type of food popularized in Japan. It consists of cooked rice combined with raw fish or other seafood.) People in this town have always liked large portions of grilled meat such as steak, so initially they are reluctant to try a restaurant that serves tiny portions of raw fish. Soon, however, an influential health report warns of the dangers of eating grilled meat and suggests that people should eat more fish, especially raw fish. Now think about the market for steak in this town. Explain the effect of this health report on the market for steak in this town in the short run. Specifically, explain what happens to the price of steak, the number of steak restaurants, and the profits of steak restaurants. Explain the effect of this health report on the market for steak in this town in the long run. Specifically, explain what happens to the price of steak, the number of steak restaurants, and the profits of steak restaurants.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The first sushi restaurant opens in a town. (Sushi is a type of food popularized in Japan. It consists of cooked rice combined with raw fish or other seafood.) People in this town have always liked large portions of grilled meat such as steak, so initially they are reluctant to try a restaurant that serves tiny portions of raw fish. Soon, however, an influential health report warns of the dangers of eating grilled meat and suggests that people should eat more fish, especially raw fish.
- Now think about the market for steak in this town. Explain the effect of this health report on the market for steak in this town in the short run. Specifically, explain what happens to the
price of steak, the number of steak restaurants, and the profits of steak restaurants.
- Explain the effect of this health report on the market for steak in this town in the long run. Specifically, explain what happens to the price of steak, the number of steak restaurants, and the profits of steak restaurants.
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