The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The grap 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 lin 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. Price ($) 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B● Soy Bean Market A с Short-run supply Long-run supply Demand 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (millions of bushels) Price ($) 222981SSHNIONS ON 20 17 16 15 14 13 12 10 B Roy's Soys Average total cost ●U 2 1 Marginal cost 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Quantity (hundreds of bushels)

The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The grap 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 lin 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. Price ($) 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 B● Soy Bean Market A с Short-run supply Long-run supply Demand 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (millions of bushels) Price ($) 222981SSHNIONS ON 20 17 16 15 14 13 12 10 B Roy's Soys Average total cost ●U 2 1 Marginal cost 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Quantity (hundreds of bushels)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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