Suppose a huge increase in credit card frauds leads to many businesses refusing to accept payments by credit cards. as a result, people want to keep more cash on hand, increasing the demand for money. assume the fed does not change the money supply. according to the theory of liquidity preference, the interest rate will , which causes aggregate demand to . if instead the fed wants to stabilize aggregate demand, it the money supply government bonds.

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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.