Suppose the market for the pain reliever aspirin is in long-run equilibrium at a price of $3 per bottle. New scientific research links aspirin with a reduced risk of heart disease. In the short run, what will happen to the price of aspirin? Explain using a diagram. In the short run, how will firms respond to the change in price described in part 1? What will happen to profits? Explain using the same diagram. Given the situation described in part 2, what can we expect to happen to the number of aspirin producers in the long run? What effect will the change in the number of producers have?
Q: What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean…
A: A demand curve shows the relationship between the price of a good and the services and the demand…
Q: search The opportunity cost of the first 150 km of highway construction is the and rescue…
A: The opportunity cost is the cost of the next best alternative use. The trade-off between the goods…
Q: There is a unit mass of individuals ("sellers") willing to sell their cars to a unit mass of buyers.…
A: In a Perfect Bayesian equilibrium, both buyers and sellers have perfect information about the…
Q: Here is an industry in long run equilibrium. What is profit in this industry when demand is at D1?…
A: Perfect competition is a type of market structure in which there are large number of buyers and…
Q: Classify the cost elements shown below for the Impressive Printing Company into the proper quality…
A: Cost element cost AmountCustomer complaint remakes28,300Printing plate revisions25,700Quality…
Q: Unit of Labor 0 1 2 3 4 5 6 Total Product 0 15 28 39 48 55 60 Product Price $ 2.20 2.0 1.80 1.60…
A: A firm should keep hiring labor until the marginal revenue product is more than the marginal cost of…
Q: How might a change in the elasticity of substitution between labour and capital affect the shape of…
A: Labor demand curve shows the combinations of hiring employers at the given wages or salary but under…
Q: Determine the effects of a decrease in the real interest rate: Consumption Investment Currency…
A: Real interest rate:The real interest rate is the nominal interest rate adjusted for the effects of…
Q: he Dean of a College is looking for a tenured professor to teach in the Core Curriculum. Monetary…
A: Nash Equilibrium in game theory is a decision making strategy that a player can achieve by selecting…
Q: Graph the short-run tradeoff between inflation and unemployment that this economy faces. Label the…
A: The Phillips Curve represents an inverse relationship between inflation and unemployment. In other…
Q: Which country had the largest increase in per caps real GDP between 2013 and 2020 OAB BA OF C 0:00 D…
A: Per capita real GDP refers to the measurement of a country's gross domestic product (GDP) per…
Q: Tennis balls and tennis rackets are complements. If a 8 percent increase in the price of tennis…
A: Commodities that are used jointly by individuals are called complements. These two commodities have…
Q: Price Level 0 LRAS Red GDP SRAS, SRAS2 -SRAS, 32. Refer to Exhibit 13-1. A continued increase in the…
A: Aggregate demand shows the total amount of spending that is done by various sectors of the economy…
Q: 1 1 09. Consider a production function of the form y=AK2 L2 where y is units of output, K is units…
A: The objective of the question is to determine the increase in output when the number of people…
Q: In an open economy, if domestic spending exceeds output, we and net exports are import; negative…
A: The correct completion of the sentence would be:"We import the difference, and net exports are…
Q: Calculate the elasticity of supply for the supply curve P = 10 + 3Q when P = 25 and Q = 5
A: The elasticity of supply is the measure of how elastic is the supply concerning the price level for…
Q: Effects of a price change graph that shows Income Effect and Substitution Effect on the same graph.…
A: "Since you have posted multiple questions, we will provide the solution only to the first question…
Q: Suppose that investment spending decreases by $300 and no leakages occur except household saving.…
A: This can be defined as a concept that shows the total amount of demand for the commodity and…
Q: What would have a larger effect on aggregate demand: $150 billion of tax cuts or $150 billion of…
A: Government expenditure is the amount of money spent by the government on welfare projects and for…
Q: Public policy refers to the outputs of governmental institutions. O True O False
A: The government makes various policies to balance economic activities. Imbalances in these economic…
Q: Along U1 you are indifferent between any of the combinations of burgers and soft drinks so you get…
A: This can be described as the concept that provides the graphical representation of the combination…
Q: A monopolist sell
A: a) Calculate the amount of the product that the profit maximizing monopolist should sell in each…
Q: Perfect competition is a market structure Group of answer choices in which any firm would have…
A: A competitive market is a market structure characterized by many buyers and sellers offering…
Q: Price 16 15 14 13 12 11 10 Monopoly DI Quantity
A: The monopoly market is referred to as the single-seller commodity market, producing solely one…
Q: 1. Imagine that you've just landed a job as a market analyst and your initial assignment is to…
A: Duopoly market refers to the type of market where only two producers or sellers exist in the entire…
Q: The table below shows a portion of the demand schedule faced by a monopoly firm. Based on the table,…
A: A monopoly is a market situation where there is a single seller who monopolises the production of a…
Q: To restrict a firm's monopoly power, why can't antitrust authorities just set a floor or a ceiling…
A: The answer is b) It is difficult to set a fair price, and even if regulators did, the firm would…
Q: Suppose that the market demand function for cows is Q=64,000,000p-2, where Q is the number of cows…
A: Demand function of cows,Q = 64,000,000p-2 -----------1 Supply function of cows,Q= p…
Q: Suppose the minimum reserve ratio for private banks is lowered. As a result, banks can make _______…
A: Reserve ratio is the ratio at which bank should reserve the part of cash or deposit in cash , it…
Q: In a gambling game, the first player must choose to guess that the next card will be red or to guess…
A: This is a two-player zero-sum game where the first player has three strategies: guess red, guess…
Q: Describe in detail how taxes impact consumer and producer surplus. In your discussion, also show…
A: Taxation is the cycle by which a government or other taxing power powers a financial charge or duty…
Q: Because of the role of agriculture in DVCs, which institutional obstacle is particularly important…
A: Developing countries are the countries with less GDP and industrial base. It has a low ranking on…
Q: Which economic utilities (values) are associated with supply chain management? O Exchange, Time and…
A: Economic utilities handle important facets of the product lifecycle and are thus essential to supply…
Q: Price Level 150 135 120 LRAS AD 9 10 11 Real GDP per Year ($ trillions) Consider the above figure.…
A: The point where LRAS (Long-run aggregate supply curve) intersects the AD curve is known as the…
Q: In the short run, at a market price of $20 per candle, this firm will choose to produce candles per…
A: A perfectly competitive firm comprises many buyers and sellers wherein each seller sells identical…
Q: for the last two questions, my answer options are if the Federal Reserve bought bonds worth $600…
A: Money supply is the total amount of money which is held by the common public at a specific point of…
Q: Create a game with one NE in pure strategies and one NE in mixed strategies.
A: A pure strategy in game theory refers to a specific, definite action or choice that a player makes…
Q: Refer to the above diagrams, in which the numbers in parentheses near the AD1, AD2, and AD3 labels…
A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…
Q: Suppose the following statistics characterize the financial health of the hypothetical economy…
A: A combination of countries' final goods and services is known as Gross domestic product. It measures…
Q: The government has identified four markets that they would like to intervene in to help domestic…
A: Producer's surplus is an economic concept that represents the difference between the actual price a…
Q: By forcing monopolists to set price equal to marginal cost, A. economic loss can occur. B. economic…
A: A monopoly is a market structure in which a single seller or producer dominates the entire supply of…
Q: Consider a keynesian macromodel Y=(C0+G+I) / (1-c) where C0 is autonomus consumption, G is…
A: The objective of the question is to understand the impact of an increase in labor productivity and…
Q: Estimate the cost of expanding a planned new clinic by 14.2,000 ft². The appropriate capacity…
A: COST can be defined as a concept that shows the amount of expenditure and any other sacrifice such…
Q: The net present value method does not incorporate the time value of money. O True O False
A: Cash flow refers to the movement of money into or out of a business, project, or financial…
Q: Suppose that an acre of wetland can sequester 100 tons of CO2 and reduce the risk of ts would…
A: Given values,the value of the wetlands ecosystem service per acre is $8,030.
Q: Suppose that real GDP is currently $19.3 trillion, potential GDP is $23.0 trillion, the government…
A: The real GDP is $19.3 trillion. The potential GDP is $23 trillion.The government purchases…
Q: The demand price for a monopolistic firm's product is a function of quantity q and quality s: P…
A: The demand for the monopolistic firm is given as where, q is the quantity and s is the quality,The…
Q: How are tax incentives for saving investment and work used effectively?
A: Tax incentives for saving, investment, and work are tools that governments use to encourage certain…
Q: Interest rates fall as the supply of money increases because a. businesses want to borrow more when…
A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…
Q: When the Federal Reserve was created, its most important role was intended to be a storage facility…
A: Federal reserve system often knows as "fed" is the central bank of the united states. It uses its…
Suppose the market for the pain reliever aspirin is in long-run equilibrium at a
- In the short run, what will happen to the price of aspirin? Explain using a diagram.
- In the short run, how will firms respond to the change in price described in part 1? What will happen to profits? Explain using the same diagram.
- Given the situation described in part 2, what can we expect to happen to the number of aspirin producers in the long run? What effect will the change in the number of producers have?
Step by step
Solved in 3 steps with 2 images
- Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 150 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement will cause consumers to demand tuna 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 CDC's announcement. 10 9. Supply Demand 7 Supply 4 3 Demand 2 1 30 60 90 120 150 180 210 240 270 300 QUANTITY (Millions of cans) PRICE (Dollars per can)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 diagramsSuppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 250 million cans per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in tuna helps prevent many viral infections from spreading. The CDC's announcement will cause consumers to demand tuna at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC's announcement. 10 Supply Demand 8 7 Supply 3 Demand 2 1 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)
- Now suppose that coffee shop coffee is a normal good and income goes up. Starting from the diagram in (1), show and discuss with your group how the market will adjust towards a short-run equilibrium and then return to a long-run equilibrium. What happen to the market price and quantity in the short-run? What happens to individual firm output and the number of firms in the short-run? What is the profit in the short-run? What happen to the market price and quantity in the long-run? What happens to individual firm output and the number of firms in the long-run? What is the profit in the long-run? (in reference to https://www.bartleby.com/questions-and-answers/market-for-coffee-shop-coffee-sarbucks-store-market-for-coffee-shop-coffee-sarbucks-store/0b934604-546c-4b2a-ae02-e65f6f9c2eb2 )An article in Trinidadian Gazette described a marketing campaign by a beverage company. The article states that “many senior managers felt uneasy about the extremely high prices of carbonated beverages. They also believed that with the sharp increases there would be a fall in demand which would again cause prices to fall further. What mistake did the senior managers make with their analysis of the situation? Illustrate your answer with a graph.Does a change in technology lead to a shift in the demand curve? Why, or why not? Your answer cannot exceed 100 words.
- Increasing demand from China has made New Zealand the world's biggest exporter of dairy products . Its exports of milk to China increased by 45 % in 2013. More than 300 000 hectares land in New Zealand have been transferred to dairy use from other forms of farming and forestry use since 2000. The increase in milk production has caused the average cost of its production to fall and changes in production methods have affected the price elasticity of supply of milk . Discuss whether the average cost of production always decreases when a firm increases the total output that it produces(Define economies of scale and diseconomies of scale Use of graph to explain ( if applicable ) Explain the various economies of scale e.g. purchasing economies of scale [ up to 5 ] Explain the various diseconomies of scale [ up to Brief conclusion)Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 350 million cans per year. Suppose the Surgeon General issues a report saying that eating tuna is bad for your health. The Surgeon General's report will cause consumers to demand tuna 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 Surgeon General's report. 10 Supply Demand 8 7 Supply Demand 2 1 70 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of cans) In the long run, some firms will respond by until PRICE (Dollars per can)Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 250 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in chicken is causing bacterial infections to spread around the world. The CDC's announcement will cause consumers to demand Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the CDC's announcement. PRICE (Dollars per pound) 78°F Sunny 10 9 8 Supply chicken at every price. In the short run, firms will respond by Demand F5 H Demand Supply O J (?) [+ & F9 O F10 F11 F12 Fn
- A retail chain will buy 900 cordless phones if the price is $30 each and 800 if the price is $40. A wholesaler will supply 350 phones at $40 each and 1400 at $70 each. Assuming that the supply and demand functions are linear, find the market equilibrium point and explain what it means.Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 150 million pounds per year. Suppose the Surgeon General issues a report saying that eating shrimp is bad for your health. The Surgeon General’s report will cause consumers to demand shrimp 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 Surgeon General’s report. In the long run, some firms will respond by until . Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the Surgeon General’s report and the new long-run equilibrium after firms and consumers finish adjusting to the news. The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run.Suppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per block of tofu and quantity of 25 million blocks per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as tofu could increase your expected lifespan by 4 years. The publication is expected to cause consumers to demand tofu 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 publication. PRICE (Dollars per block) 2 1 Supply Demand Demand 0 05 10 15 20 25 30 35 40 45 50 QUANTITY (Millions of blocks) In the long run, some firms will respond by Supply until Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long- run equilibrium after firms and consumers finish adjusting to the news. PRICE (Dollars per block) 2 10 9 Supply…