Overview: Consider that the market for frozen beef patties is perfectly competitive, with hundreds of suppliers across the country. Currently the market is in equilibrium, and Fiona's Farm is one of the many suppliers producing frozen beef patties that are sold in stores across the country. Questions For each of the following events, consider the market for frozen beef patties and how Fiona's Farm should respond in both the short run and long run.

That is, for each event:

1. state how Fiona's Farm should adjust the amount of frozen beef patties produced (quantity) in the short run and in the long run.

2. state how profits at Fiona's Farms are affected in the short run, and in the long run.

Treat each event separately.

Event 1: An increase in publicity about the health benefits of vegetarian and vegan food reduces the number of beef patties the average person consumes by 20% permanently.

Event 2: In an attempt to reduce the incidence of high cholesterol and heart disease, the legislature of the state in which Fiona's Farm operates imposes a tax equal to 25% of the market price.