Answer to Question #332261 in Microeconomics for Johan

Question

Assume that the egg industry is perfectly competitive and is in long-run equilibrium with a perfectly elastic long-run industry supply curve. Health concerns about cholesterol then lead to a decrease in demand. Construct a figure similar to Figure 7-7 from your pdf text (page 263 of 698), showing the short-run behavior of the industry and how long-run equilibrium is reestablished.

Answer 1

Long-run Supply Curve: As the chart demonstrates, a market’s long-run supply curve is the sum of a series of short-run supply curves in a given market.