The graph titled Soy Bean Market is a graph of the market for soy beans, a...

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The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The graph titled Roy's Soys depicts an individual firm in the market for soy beans. The market and the firm are currently in long-run equilibrium at Point A. Show what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight- loss supplement. On the market graph, shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. Now, show the changes that get both graphs back to long-run equilibrium. Shift the appropriate curve(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the points labeled C. Price ($) 29816SHMNIS 4 20 17 15 14 13 11 10 7 5 3 2 1 B ● Soy Bean Market A Short-run supply Long-run supply Demand 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (millions of bushels) Price ($) 2229BTSHMNIPOSTS & 21 20 19 18 17 16 15 14 13 12 11 10 8 7 6 5 4 3 2 1 0 ● B Roy's Soys Average total cost A n● Price 2 Price 3 Price Marginal cost 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (hundreds of bushels) The graph titled Soy Bean Market is a graph of the market for soy beans, a perfectly (purely) competitive market. The graph titled Roy's Soys depicts an individual firm in the market for soy beans. The market and the firm are currently in long-run equilibrium at Point A. Show what happens in the short run on both graphs when a new medical study shows soy beans to be an effective weight- loss supplement. On the market graph, shift a curve (or curves). On the firm's graph, use "Price 2" to draw a new price line for the firm. On both graphs, indicate the new equilibrium points with the points labeled B. Now, show the changes that get both graphs back to long-run equilibrium. Shift the appropriate curve(s) for the market and "Price 3" for the firm. Indicate the new long-run equilibrium with the points labeled C. Price ($) 29816SHMNIS 4 20 17 15 14 13 11 10 7 5 3 2 1 B ● Soy Bean Market A Short-run supply Long-run supply Demand 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (millions of bushels) Price ($) 2229BTSHMNIPOSTS & 21 20 19 18 17 16 15 14 13 12 11 10 8 7 6 5 4 3 2 1 0 ● B Roy's Soys Average total cost A n● Price 2 Price 3 Price Marginal cost 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity (hundreds of bushels)

Answer rating: 100% (QA)

The increase in demand for Soybeans shifts the demand curve to rightward D2 It interse... View the full answer