In the short run, firms will In the short run, the supply curve will On the previous graph, show the shift in the supply curve and then use the purple point (diamond symbol) to indicate the resulting new long- run equilibrium. Comparing the two long-run equilibria on the graph, you can see that the orange juice market is an example of On the previous graph, use the green line (diamond symbols) to plot the long-run market supply curve for orange juice.
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- Now analyze the impact of the outbreak of respiratory illnesses on the market for antibiotics. What health care experts are calling the “tripledemic” (Covid, flu, and RSV) has dramatically increased demand for antibiotics in the United States. Assume there are no changes to the supply of these drugs. On the same graph you produced in Question 1, graphically depict any changes affecting the market for antibiotics and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). Indicate the new market equilibrium P1 and Q1, the optimal output of an individual firm representative of the other firms in the industry at this SRE (labeled as q1), and the individual firm’s profit π1, if any (shaded and clearly labeled). Reminder: be sure to label all relevant points and axes.The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 8, 16, 20, 24, 32, and 40 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 8 versus 7 units. Then, calculate the marginal revenue of the eighth unit produced. The marginal revenue of the eighth unit produced is . Calculate the total revenue if the firm produces 16 versus 15 units. Then,…In her article for Slate, Glaser (2017) suggests that consumers are willing to pay any price for the latest Apple iPhone. In fact, even those who are not willing to do so may be encouraged or ‘nudged’ to purchase the latest device. However, a range of studies have indicated serious health implications associated with smartphone usage. Assuming companies like Apple cannot easily increase or decrease supply in the short-run, how might this information alter the market equilibrium for smartphones? including diagrams
- In the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases Answer/ Demand increases - Curve shifts right - Price of substitutes 1. Pepsi - The price of Coke decreases dramatically. 2. Steak - Incomes fall due to the recession 3. Hair dye - Hair dye is successfully advertised in the media. 4. Computer software - The price of computers goes down.In the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases EXAMPLE ANSWER/ Demand increases - Curve shifts right - Price of substitutes Rock Salt - It snows 8 inches over nightIn the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases EXAMPLE ANSWER/ Demand increases - Curve shifts right - Price of substitutes Salt - The price of salt doubles. 2. Sunscreen - Summer approaches. 3. Big Macs - The population in the United States increases by 20%. 4. Rock Salt - It snows 8 inches over night
- The following graph shows the market for annual tortilla chip consumption, which is initially in long-run equilibrium at point D. After the change in tastes and the rightward shift in demand, the market moves to point in the short run and then to point in the long run. On the following graph, use the purple line (diamond symbol) to plot the long-run market supply curve for tortilla chips, making sure that it goes through two of the points A, B, C, or D. PRICE (Dollars per bag 10 9 8 2 1 D 0 1 True B D₁ O False 23 C S 10²4 NO 2 3 4 5 7 8 QUANTITY (Milions of bags per year) According to the graph, the tortilla chip market is an example of 10 Long-Run Supply True or False: The average cost at the cost-minimizing level of output is lower for the new marginal firm than it was for the marginal firm before the change in demand. industry.Consider the market for soybeans. The following graph shows the weekly demand for soybeans and the weekly supply of soybeans. Suppose a blight occurs that destroys a significant portion of soybean crops. Show the effect this shock has on the market for soybeans by shifting the demand curve, supply curve, or both. 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. (? 30 Supply Demand Supply Demand 12 18 24 30 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because he believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for soybeans between the prices of $15 and…how will the market reach equilibrium according to this graph shown below?
- Supply and Demand The law of demand and supply are important in business. The law of demand states that as price of a good or service increases, the quantity demand decreases and vice versa. While the law of supply states that as prices of goods and services increase, the quantity supplied increases. The law of demand is a good concept for businesses when setting prices. As businesses raise prices, consumers may buy less of the product because their incomes are mostly stagnant. For example, a parent may buy 4 loaves of bread at $2 each which is $8, but may decide to only buy 2 loaves of bread when the price of a loaf of bread increases to $4. This is because the parent’s income is stagnant and he or she has allocated only $8 for bread. Discussion question The law of demand states that as the price of a good or service increases, the quantity demanded goes down and vice-versa. Share an example of a good or service that follows the law of demand. Give an example of goods or services…Consider the economy of Russia, which produces oil and cars that are sold both domestically and internationally. Suppose an increase in foreign income causes an increase in the world demand for oil, whereas the supply does not change. The following graph shows the market for oil in Russia. Adjust the following graph to show the effect of a higher demand for oil on the economy of Russia. 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.The following graph shows the market for cakes in Miami, where there are over 1,000 bakeries at any given moment. Suppose the number of bakeries decreases significantly. Show the effect of this change on the market for cakes by shifting one or both of the curves on the following graph, holding all else constant. 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. PRICE (Dollars per cake) QUANTITY (Cakes) Supply Demand Demand Supply ?