1. Consider the perfectly competitive cherries industry. In recent years there has been an increase in demand worldwide caused by the growing demand from Asia Pacific and more people realizing the importance of fresh fruits in diet. Please discuss the effects on the cherries market. Particularly, what are the effects on the cherries market in the short run? What is the typical firms' short-run response? How this industry and the typical firm adjust to this changing market condition in the long run? Please draw the graphs for the whole industry and the typical firm and explain in words. (20 points)