Jackman industries has two service departments, maintenance and power, and two operating departments, production and assembly. management has decided to allocate maintenance costs on the basis of direct-labor hours in each department and power costs on the basis of machine hours. the following data were experienced by the company in the current period: maintenance power production assembly direct labor hours 0 400 4,000 2,000 machine hours 2,000 0 8,400 1,600 department direct costs $ 9,000 $ 20,000 $ 70,000 $ 50,000 what is the total service cost allocated to the production department during the period if the direct method of cost allocation is used?

answernaturalistic observation;

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.