Suppose that the turkey industry is in long-run equilibrium at a price of $5 per
ID: 1118485 • Letter: S
Question
Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. Suppose that WebMD claims that the bacteria found in turkey will decrease your expected lifespan by 5 years.
8. Short-run and long-run effects of a shift in demand Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. Suppose that WebMD claims that the bacteria found in turkey will decrease your expected lifespan by 5 years WebMD's claim will cause consumers to demand turkey at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of WebMD's claim.Explanation / Answer
Webdm claim will decrease demand at each price and will shift the demand curve leftward.
Im short run will respond by decreasing output and will ahut down if new price is less than min of AVC
In long run some firm will exit until again the new equilibrium price becomes 5
Shift the demand and supply curve bith leftward in such a way that new price is also 5
Constant cost industry in the long run
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