The 2010 oil spill in the Gulf of Mexico caused the oil firm BP and the U. S. government to greatly increase purchases of boat services, various oil-absorbing materials, and other goods and services to minimize damage from the spill. Use side-by-side firm and market diagrams to show the effects (number of firms, price, output, profits) of such a shift in demand in one such industry, such as boat services, in both the short run and the long run. Explain how your answer depends on whether the shift in demand is expected to be temporary or permanent.
Answer to relevant QuestionsIn 2009, the voters of Oakland, California, passed a measure to tax medical cannabis (marijuana), effectively legalizing it. In 2010, the City Council adopted regulations permitting industrial-scale marijuana farms with no ...The government sets a minimum wage above the current equilibrium wage. What effect does the minimum wage have on the market equilibrium? What are its effects on consumer surplus, producer surplus, and total surplus? Who are ...If the inverse demand function is p = 500 – 10Q, what is the elasticity of demand and revenue at Q = 10? The inverse demand function a monopoly faces is p = 10Q–0.5. The firm’s cost curve is C(Q) = 5Q. What is the profit-maximizing solution? If the inverse demand function is p = 120 – Q and the marginal cost is constant at 10, how does charging the monopoly a specific tax of t = 10 per unit affect price and quantity and the welfare of consumers, the monopoly, ...
Post your question