In the short run, firms will 1. (earn economic profits, suffer economic losses). In the long run, the supply curve will 2. (shift rightward, shift leftward, remain unchanged) Comparing the two long-run equilibria on the graph, you can see that the milk market is an example of 3. (a decreasing-cost industry, an increasing-cost industry, a low-cost industry, a high-cost industry) The following graph shows the market for milk. Initially, the market is in a long-run equilibrium.Suppose that a change in tastes resulted in a leftward shift in demand.On the following graph, shift the demand or supply curve to reflect this change in tastes. Then use the grey point (star symbol) to indicate the newshort-run equilibrium.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 backto its original position, just drag it a little farther.10Short-Run SupplyDemandShort-Run SupplyShort-Run EquilibriumDemandLong-Run Equilibrium210Long-Run SupplyQUANTITY (Thousands of litres)PRICE (Dollars per litre) Short-Run SupplyDemandShort-Run SupplyShort-Run EquilibriumbemandLong-Run Equilibrium210Long-Run SupplyQUANTITY (Thousands of itres)In the short run, firms will. In the long run, the supply curve willOn the preceding 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 milk market is an example ofOn the preceding graph, use the green line (diamond symbols) to plot the long-run market supply curve for milk.PRICE (Dollars per itre)

The constant cost industry is the industry; the exit of the firm will not affect the input prices of…

In the short run, firms wil, In the long run, the supply curve wil On the preceding 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 milk market is an example of On the preceding graph, use the green line (diamond symbols) to plot the long-run market supply curve for milk.

In the short run, firms wil, In the long run, the supply curve wil On the preceding 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 milk market is an example of On the preceding graph, use the green line (diamond symbols) to plot the long-run market supply curve for milk.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.11P

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