Question

Homework (Ch 14) < Back to Assignment Attempts: Keep the Highest: 5 3. Short-run and long-run effects of a shift in demand Suppose that the shrimp industry is in long run equibrium at a price of $5 per pound of shrimp and a quantity of 350 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 at every price in the short run, firms will respond by Shit the demand curve, the supply curve, or both on the following graph to Wustrate these short rutech on the San Gennart 0 Demand Suply PRICE Dolars per pound) 743210 10 430 4000 QUANTITY Misions of pounda 4000 In the long run, some firms will respond by

Answer 1

Since its bad for your health, the demand will decrease

Blanks-

1) less

2) producing less shrimp and running at a loss

Demand Suply PRICE (Dolars per pound) 2103 0 QUANTITY Mons of pounds 04700

3) exiting the industry

4) each firm in the industry is once again earning zero profit

Supply 70 140 210 200 400 400 0 00 700 QUANTITY (Milions of pounds)

5) horizontal