Question

Assume that the oyster industry is perfectly competitive and initially in long-run equilibrium. Build a graph...

Assume that the oyster industry is perfectly competitive and initially in long-run equilibrium. Build a graph representing long run-equilibrium for the industry and a firm in the industry.

Now suppose the news media report the contamination of oyster fisheries in the coastal waters off the easter U.S. Building on the graph illustrate the immediate effect of this news on the following variables.

1. industry demand

2. market price of oysters

3. demand curve facing a typical fishery

4. number of fisheries

Does supply increase or decrease?

Homework Answers

Answer #1

B.

Allocative effectiveness or efficiency is characterized where cost approaches negligible expense. Gainful or production efficiency or effectiveness is regarding the purpose of delivering the merchandise at most reduced expense. The yield of a perfect competitive firm fulfills both these conditions.

C.

i.the industry demand falls as it movements to the left

ii. the market cost oyster additionally falls.

II.the request bend confronting a regular fishery likewise falls

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Illustrate the model of a perfectly competitive firm that is in long-run equilibrium. Your graph should...
Illustrate the model of a perfectly competitive firm that is in long-run equilibrium. Your graph should have the demand curve facing the firm, price, MR, MC, and ATC. Identify the optimal level of output. What is the firm’s profit in the long-run?
Suppose a perfectly competitive, increasing-cost industry is initially in long-run equilibrium and demand suddenly increases. Explain...
Suppose a perfectly competitive, increasing-cost industry is initially in long-run equilibrium and demand suddenly increases. Explain how the demand change affects price and quantity and who benefits from the increased demand.
Assume that a perfectly competitive, constant cost industry is in a long run equilibrium with 60...
Assume that a perfectly competitive, constant cost industry is in a long run equilibrium with 60 firms. Each firm is producing 90 units of output which it sells at the price of $41 per unit; out of this amount each firm is paying $3 tax per unit of the output. The government decides to decrease the tax, so the firms will be paying $1 tax per unit. a) Explain what would happen in the short run to the equilibrium price...
A perfectly competitive industry with constant costs initially operates in long-run equilibrium. When demand increases: A....
A perfectly competitive industry with constant costs initially operates in long-run equilibrium. When demand increases: A. in the long and short runs, prices and profits will be lower relative to what they were before the demand increase. B. in the short run, prices and profits will be higher, but in the long run, price will fall back to its original level and firms will again earn zero economic profit. C. in the short run, prices and profits will fall, but...
17.   Assume that a perfectly competitive industry is operating at its long run equilibrium. Then, the...
17.   Assume that a perfectly competitive industry is operating at its long run equilibrium. Then, the demand for its product increases. Which of the following best describes the SHORT RUN response? A.  market demand shifts right, firms' demand curves decrease, and output decreases. B.  market demand shirts right, firms' demand curves decrease, and output increases. C.  market demand shifts right, firms' demand curves increase, and output increases. D.  market demand shirts right, firms' demand curves increase, and output decreases. 18.   Assume that the increase...
Describe the process by which a perfectly competitive industry moves from one long run equilibrium to...
Describe the process by which a perfectly competitive industry moves from one long run equilibrium to another after a one time decrease in demand.
Consider a constant-cost competitive industry that is initially in long-run equilibrium. If there is an increase...
Consider a constant-cost competitive industry that is initially in long-run equilibrium. If there is an increase in demand in this industry, which of the following do we expect to observe in the new long-run equilibrium (compared to the initial equilibrium)? a. Firms are making positive economic profits. b.Each firm in the market is producing a larger quantity. c. The market price will be higher. d. There will be a larger number of firms in the industry. e. None of the...
In a perfectly competitive industry, the current short-run equilibrium has P>ATC. In the long run equilibrium,...
In a perfectly competitive industry, the current short-run equilibrium has P>ATC. In the long run equilibrium, there will be: More firms in the market Less firms in the market The number of firms would not change Any of above None of above
32.   The relationship that indicates that the perfectly competitive firm in long-run equilibrium is economically efficient...
32.   The relationship that indicates that the perfectly competitive firm in long-run equilibrium is economically efficient is that A.   long-run marginal cost equals long-run average cost at long-run average cost’s lowest value. B.   the typical firm earns neither economic profits nor economic losses. C.   marginal benefit equals long-run marginal cost. D.   demand equals marginal revenue equals average revenue equals price. 33.   The perfectly competitive lobster market is in long-run equilibrium. Following an increase in demand we would expect the typical...
Starting from a generalized long-run equilibrium scenario for a perfectly competitive constant-cost industry, describe in words...
Starting from a generalized long-run equilibrium scenario for a perfectly competitive constant-cost industry, describe in words and support with the appropriate firm- and market-level graphs how you would derive the long-run industry supply curve after a decrease in market demand. Label and explain all steps as we did in class when we considered an increase in market demand.