Given the business situation of Mrs. Acres Homemade Pies (p. 30) and using the economic concepts of supply and demand, explain 1) Discuss what you think will happen to the supply, demand and price of the product in the short-term; 2) Discuss what you think will happen to supply, demand and price of the product in the long-term. 3) Explain why you think supply, demand, or equilibrium price will be different, if at all, in the short-term and the long-term.

Discuss what you think will happen to the supply, demand and price of the product in the short-term; 2)

W%hat will happen to supply,demand,and price of the product in the short-term

To analyze the supply, demand, and price of Mrs. Acres Homemade Pies in the short-term and long-term, we need to understand the basic concepts of supply and demand. Supply refers to the quantity of a product that businesses are willing and able to produce and sell at different prices. Demand, on the other hand, represents the quantity of a product that consumers are willing and able to purchase at various prices.

1) Short-term impact on supply, demand, and price:
In the short-term, let's assume that Mrs. Acres Homemade Pies experiences a sudden increase in popularity, resulting in a surge in demand. However, due to limited production capacity, the supply might not be able to keep up with the sudden increase in demand. As a result, the supply may remain relatively constant or increase slightly.

Since the demand exceeds the supply due to the sudden popularity, there will be upward pressure on price. This means that the price of Mrs. Acres Homemade Pies is likely to increase in the short-term. The high demand and limited supply can create a scenario where people are willing to pay higher prices to secure a pie.

2) Long-term impact on supply, demand, and price:
In the long-term, Mrs. Acres Homemade Pies could respond to the increased demand by expanding their production capacity. This could involve investing in additional equipment, hiring more staff, or finding ways to increase efficiency. As a result, the supply of pies may increase to match or even exceed the demand.

With an increased supply in the long-term, the pressure on price may decrease. If supply consistently exceeds demand, Mrs. Acres Homemade Pies might need to lower prices to attract customers or maintain market share. This could lead to a decrease in price in the long-term.

3) Difference in supply, demand, or equilibrium price in the short-term and long-term:
In the short-term, Mrs. Acres Homemade Pies might struggle to meet the sudden increase in demand, leading to a relatively limited supply. This limited supply, coupled with high demand, could result in higher prices. However, in the long-term, if Mrs. Acres Homemade Pies successfully expands its production capacity, supply might be able to meet or exceed the demand. Consequently, this could lead to decreased pressure on prices, potentially resulting in lower prices.

It's important to note that these scenarios are hypothetical and depend on various factors, such as the business's decision-making, market competition, and customer preferences. Economic analysis can provide a framework for understanding potential outcomes, but real-world situations often involve many complex variables that can influence the dynamics of supply, demand, and price.