Talboe Company makes wheels which it uses in the production of children's wagons. Talboe's costs to produce 200,000 wheels annually are as follows:Direct material $40,000Direct labor 60,000Variable manufacturing overhead 30,000Fixed manufacturing overhead 70,000Total $200,000An outside supplier has offered to sell Talboe similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $25,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for $55,000 per year. If Talboe chooses to buy the wheel from the outside supplier, then the change in annual net operating income is a:

$40,000 increase in annual net operating income

Explanation:

If Talboe buys the the wheels then the annual net operating income of the company will be $40,000

Cost of purchasing wheels $0.80 per wheel * 200,000 wheels = $160,000

savings in fixed cost $25,000

Rental income from wheels $55,000

Net cost of buying the wheels $80,000

If company manufactures the wheels its total cost is $200,000

The net change in operating income is $200,000 - $160,000

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.