Dunkin Foods just paid an annual dividend of $2.00 a share. Management estimates the dividend will increase by 20 percent a year for the next 4 years. After that, the annual dividend growth rate is estimated at 5 percent. The required rate of return is 15 percent. What is the value of this stock today

answer(b) equal; set period;

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.