HW: Firms in Competitive Markets Assignment Shift 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 O 7 Supply 5 PRICE (Dollars per block) 3 Demand 2 45 90 135 180 225 5 270 315 360 405 450 QUANTITY (Millions of blocks)\fThe new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run.HW: Firms in Competitive Markets Assignment 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 225 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 V tofu at every price. In the short run, rms will respond by v If there were 10 rms in this market, the short-run equilibrium price of rhenium would be per pound. At that price, rms in this industry would V .Therefore, in the long run, rms would V the rhenium market. Because you know that competitive rms earn v economic prot in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be V rms operating in the rhenium industry in longrun equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative aooounling prot. 0 True 0 False In the long run, some firms will respond by untilHW: Firms in Competitive Markets Assignment 8. Short-run and long-run effects of a shift in demand Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 125 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links seitan consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand v seitan at every price. In the short run, rms will respond by v HW: Firms in Competitive Markets Assignment 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 CO 7 Supply PRICE (Dollars per block) Demand 2 0 45 90 135 180 225 270 315 380 405 450 QUANTITY (Millions of blocks)