8. Short-run and long-run effects of a shift in demand

Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 400 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 theshort run, firms will respond by .

Shift the demand curve, the supply curve, or both on the following graph to illustrate theseshort-runeffects of the Surgeon General's report.

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In thelong run, some firms will respond by until .

Shift the demand curve, the supply curve, or both on the following graph to illustrateboththe short-run effects of the Surgeon General's reportandthe new long-run equilibrium after firms and consumers finish adjusting to the news.

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The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long