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Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 300 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in turkey is causing bacterial infections to spread around the world.

The CDC's announcement will cause consumers to demand________turkey at every price. In the short run, firms will respond by__________

Respuesta :

batolisis

Answer:

  • consumers to demand less turkey at every price
  • In the short run firms will respond by producing less turkey

Explanation:

Since the industry is in a long-run equilibrium at a price of $5 per pound of turkey it produces every year and it produces a large number of Turkey every year.

The effect of the CD'S  announcement that a chemical found in Turkey causes bacterial infections to spread will create a panic in the consumers and the demand for turkey will drastically reduce in the short term and in order to curtail losses the firms will produce lesser amount of turkey in the short run as well due to the decrease  in demand. therefore a new equilibrium price < $5 will be created in the short term.

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