draw a industry graph that shows the adjustment to long run equilibrium. label the price.

Expert Solution

Rahul Sunny answered 8 months ago

Graph 1 Draw an AD/SRAS/LRAS graph in initial long run equilibrium. Label the vertical and horizontal...

Graph 1 Draw an AD/SRAS/LRAS graph in initial long run equilibrium. Label the vertical and horizontal axes appropriately. Clearly identify the original price and real GDP level. On this graph, demonstrate what happens to the aggregate price level and real GDP when the Federal Reserve Bank runs expansionary monetary policy. Explain why you have shifted the curve you did and the direction you have shifted it. Identify whether the shift has caused a recessionary or inflationary gap. Graph 2 Draw...

Draw a graph that shows the apartment market in equilibrium with a binding rent ceiling. Label...

Draw a graph that shows the apartment market in equilibrium with a binding rent ceiling. Label equilibrium price, equilibrium quantity, rent ceiling, consumer surplus, producer surplus, and deadweight loss on the graph.

What is the long run equilibrium price in a percectly competitive industry ?

Suppose the economy is operating at both short-run and long-run equilibrium. a) Draw an initial graph...

Suppose the economy is operating at both short-run and long-run equilibrium. a) Draw an initial graph showcasing this information. Label the initial equilibrium (A).

Draw a graph showing a market and a perfectly competitive firm in long run equilibrium.

1.What will happen to the price in this market in the long run? Draw a graph...

1.What will happen to the price in this market in the long run? Draw a graph of the entire market (all firms versus all consumers) to illustrate why this happens. a.What are the characteristics of a competitive market? b. With the market back at market equilibrium, what is the consumer response given that a single firm raises its price above the equilibrium price? c.If a firm finds out that there are a lot of consumers willing to buy the good...

Suppose that a perfectly competitive industry is in long-run equilibrium. Then the price of a complementary...

Suppose that a perfectly competitive industry is in long-run equilibrium. Then the price of a complementary good decreases. Use two graphs, one for the firm, and one for the industry (and words) to explain what will happen in the short run, and then the long run, to: a. The market demand curve? b. The market supply curve? c. Market price? d. Market output? e. Representative firm output? f. Representative firm profit?

Assume that the oil industry is in a long-run competitive equilibrium at a price of $100...

Assume that the oil industry is in a long-run competitive equilibrium at a price of $100 per barrel, and that the oil industry is constant-cost. Use a carefully labeled set of two graphs to explain what would happen in the long run to the number of firms and to the production of each firm as a result of the drop in price from $100 to $76, assuming it reflected a decrease in demand. Be sure to define constant-cost and describe...

An economy in its long-run equilibrium (i.e., output is at its natural level). Draw a graph...

An economy in its long-run equilibrium (i.e., output is at its natural level). Draw a graph of the AS curve in the short run and the AD curve and, in the graph, denote by A the pair ( Y,P) where the economy finds itself. The economy is now hit by a shock: the power of unions becomes temporarily very high so the cost of hiring workers increases substantially. (a) Is this a supply shock or a demand shock? Explain. (b)...

Draw a basic AS/AD graph (with LRAS constant) showing the economy in long-run equilibrium. Assume that...

Draw a basic AS/AD graph (with LRAS constant) showing the economy in long-run equilibrium. Assume that there is a large decline in the housing sector. Show the resulting short-run equilibrium on your graph. What happens to (i) real GDP, (ii) the price level, and (iii) the unemployment rate? b. Draw a basic AS/AD graph (with LRAS constant) showing the economy in long-run equilibrium. Assume that there an increase in consumer optimism. Show the resulting short-run equilibrium on your graph. What...

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