Sonya used to earn $25,000 a year selling real estate, but she now sells greeting cards. the return to entrepreneurship in the greeting cards industry is $14,000 a year. over the year, sonya bought $10,000 worth of cards from manufacturers and sold them for $58,000. sonya rents a shop for $5,000 a year and spends $1,000 on utilities and office expenses. sonya owns a cash register, which she bought for $2,000 with funds from her savings account. her bank pays 3 percent a year on savings accounts. at the end of the year, sonya was offered $1,600 for her cash register. calculate sonya’s explicit costs, implicit costs, and economic profit.

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.