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)
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.11P
Related questions
Question
![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.
Price ($)
29816SHMNIS 4
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B
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Soy Bean Market
A
Short-run supply
Long-run supply
Demand
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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Quantity (millions of bushels)
Price ($)
2229BTSHMNIPOSTS &
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Roy's Soys
Average total cost
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Price 3
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Marginal cost
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Quantity (hundreds of bushels)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3bfc8b51-a5ac-4c46-87bd-37c742346031%2F6cf74c9b-1dfe-4b1a-ba49-0756cca2e84a%2F2fqsah7_processed.png&w=3840&q=75)
Transcribed Image Text: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.
Price ($)
29816SHMNIS 4
20
17
15
14
13
11
10
7
5
3
2
1
B
●
Soy Bean Market
A
Short-run supply
Long-run supply
Demand
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Quantity (millions of bushels)
Price ($)
2229BTSHMNIPOSTS &
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B
Roy's Soys
Average total cost
A
n●
Price 2
Price 3
Price
Marginal cost
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Quantity (hundreds of bushels)
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