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Question: The first sushi restaurant opens in town. Initially people are very cautious about eating tiny po...

Show transcribed image text The first sushi restaurant opens in town. Initially people are very cautious about eating tiny portions of raw fish, as this is a town where large portions of grilled meat have always been popular. Soon, however, an influential health report warns consumers against eating grilled meat and suggests that they increase their consumption of fish, especially raw fish. The sushi restaurant becomes very popular and its profit increases. Please answer questions la and lb below. 1a. What will happen to the short-run profit of the sushi restaurant? What will happen to the number of sushi restaurants in town in the long-run? Will the first sushi restaurant be able to maintain its short-run run profit over the long-run? Explain your answer. 1b. Local steakhouses suffer from the popularity of sushi and start incurring losses. What will happen to the number of steakhouses in the long-run? Explain your answer.

The first sushi restaurant opens in town. Initially people are very cautious about eating tiny portions of raw fish, as this is a town where large portions of grilled meat have always been popular. Soon, however, an influential health report warns consumers against eating grilled meat and suggests that they increase their consumption of fish, especially raw fish. The sushi restaurant becomes very popular and its profit increases. Please answer questions la and lb below. 1a. What will happen to the short-run profit of the sushi restaurant? What will happen to the number of sushi restaurants in town in the long-run? Will the first sushi restaurant be able to maintain its short-run run profit over the long-run? Explain your answer. 1b. Local steakhouses suffer from the popularity of sushi and start incurring losses. What will happen to the number of steakhouses in the long-run? Explain your answer.