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8. Short-run and long-run effects of a shift in demand 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 150 million blocks per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occurring in tofu are linked to chronic illness. The FDA's research 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 FDA's research. 10 O Supply Demand 00 Supply PRICE (Dollars per block) Demand 2 30 60 90 0 150 180 210 240 270 300 QUANTITY (Millions of blocks) In the long run, some firms will respond by untilShift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the FDA's research and the new long-run equilibrium after firms and consumers finish adjusting to the news. 10 O Supply Demand 00 Supply PRICE (Dollars per block) A Demand N 30 60 120 150 180 210 240 270 300 QUANTITY (Millions of blocks) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run. Grade It Now Save & Continue Continue without savingSuppose that the tofu industry is initially operating in long-run equilibrium at a price level of $5 per year. Suppose that the Food and Drug Administration (FDA) reports that compounds naturally occUI The FDA's research is expected to cause consumers to demand 7 tofu at every price. In the sh: Y producing more tofu and earning positive prot ,- graph to illustrate these short-i producing the same amount of tofu and earning positive prot producing the same amount of tofu and running at a loss producing less tofu and running at a loss entering the industry exiting the industry tially operating in long-run equilibrium at a price level of $5 per block of t ug Administration (FDA) reports that compounds naturally occurring in tof iuse consumers to demand tofu at every price. In the short run, fir less more curve, or both on the follow h to illustrate these short-run effects ?In the long run, some firms will respond by until producing more tofu and earning positive profit Shift the demand curve, the supply curve, or entering the industry short-run effects of the long-run equilibrium after firms and consume exiting the industry producing less tofu and running at a loss producing less tofu and earning positive profit producing more tofu and running at a loss 10 O 9 Supply DemandIn the long run, some firms will respond by each firm in the industry is once again earning zero profit owing graph to illustrate both the short-run new technologies are discovered that lower costs g to the news. consumer demand returns to its original level ? tofu populations grow large enough to support more firms 10upward sloping horizontal vertical downward sloping j-run supply curve in this industry is in the long Grade It Now Save & Continue