5. 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 100 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as tempeh could increase your expected lifespan by 3 years. The publication is expected to cause consumers to demand V tempeh at every price. In the short run, firms will respond by V entering the industry .ph to illustrate these short-run effects of the publication. @ producing less tempeh and running at a loss producing the same amount of tempeh and running at a loss exiting the industry producing the same amount of tempeh and earning positive profit producing more tempeh and earning positive profit Demand Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. l/ \\l \\3/ Supply Demand 6 _ Supply 5 ----------+ PRICE (Dollars per pound) Demand 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Millions of pounds) In the long run, some firms will respond by V until entering the industry exiting the industry Shift the demand curve, the supply curve, 0 rt-run effects of the publication and the new long- run equilibrium after rms and consumers producing more tempeh and running at a loss producing less tempeh and running at a loss producing more tempeh and earning positive profit producing less tempeh and earning positive profit 10 In the long run, some firms will respond by V until new technologies are discovered that lower costs each firm in the industry is once again earning zero profit g graph to illustrate both the short-run effects of the publication an: NEWS. tempeh populations grow large enough to support more firms consumer demand returns to its original level 6') 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. 10 O Supply Demand 7 Supply 5 PRICE (Dollars per pound) Demand N horizontal vertical 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Millions of pounds) downward sloping upward sloping The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run