You have been asked to compare three alternative investments and make a recommendation. Project A has an initial investment of $5 million, and after-tax cashflows of $ 2.5 million a year for the next five years. Project B has no initial investment, has after-tax cash flows of $ 1 million a year for the next ten years, and a salvage value of $2 million (from working capital). Project C has an initial investment of $10 million, another investment of $5 million in ten years, and after-tax cashflows of $ 2.5 million a year forever. The discount rate is 10% for all three projects. Which of the three projects would you pick

answer; risk transference;

answer; automated fingerprint;

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.