Your firm is planning to invest in a new power generation system. galt industries is an all equity firm that specializes in this business. suppose galt's equity beta is 0.75, the risk-free rate is 3%, and the market risk premium is 6%. if your firm's project is all equity financed, then your estimate of your cost of capital is closest to: group of answer choices

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.