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

Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 50 million pounds per year. Suppose that WebMD claims that a protein found in shrimp will increase your expected lifespan by 2 years.

WebMD's claim will cause consumers to demand shrimp at every price. In therun, firms will respond by t .

Shift the demand curve, the supply curve, or both on the following graph to illustrate theseeffects of WebMD's claim.

In thelong run, some firms will respond by until .

Shift the demand curve, the supply curve, or both on the following graph to illustratethe short-run effects of WebMD's claimandthe new long-run equilibrium after firms and consumers finish djusting 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.