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?
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.
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
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