Homework answers / question archive / Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 300 million cans per year

Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 300 million cans per year

Economics

Share With

Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a quantity of 300 million cans per year. Suppose that WebMD claims that a protein found in tuna will increase your expected life span by 3 years.

(1) WebMD's claim will cause consumers to demand more or less tuna at every price?

(2) In the short run, firms will respond by:

A. Producing the same amount of tuna and earning positive profit.

B. Exiting the industry.

C. Producing the same amount of tuna and running at a loss.

D. Producing more tuna and earning positive profit.

E. Producing less tuna and running at a loss.

F. Entering the industry.