8. Short-run and long-run effects of a shift in demand Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 50 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to healthy skin.. The viral video is expected to cause consumers to demand tempeh 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 the viral video. ? PRICE (Dollars per pound) 10 9 8 7 3 2 1 PRICE (Dollars per pound) 0 In the long run, some firms will respond by 10 0 9 8 2 10 1 0 Supply 20 30 40 50 60 70 80 QUANTITY (Millions of pounds). Demand Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the viral video and the new long- run equilibrium after firms and consumers finish adjusting to the news. 010 20 Supply Demand 00 100 50 80 70 QUANTITY (Mions of pounds) 10 100 Demand 1 Supply 10 Demand Supply until ? The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is run. in the long

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.13P

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8. Short-run and long-run effects of a shift in demand
Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 50 million
pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links tempeh consumption to healthy skin.
The viral video is expected to cause consumers to demand tempeh 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 the viral video.
PRICE (Dollars per pound)
10
9
8
2
1
PRICE (Dollars per pound)
0
10
9
In the long run, some firms will respond by
8
00
0
3
2
1
10
0
0
Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the viral video and the new long-
run equilibrium after firms and consumers finish adjusting to the news.
20 30
10
50
60
70
QUANTITY (Millions of pounds)
40
Supply
Demand
20 30
80
Supply
40 50 60 70
QUANTITY (Millions of pounds)
90 100
Demand
80
90
Demand
100
Supply
Demand
-
until
Supply
The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is
run.
in the long

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