Note: For all sub-questions of Question 2, your answer should not exceed 500 words excluding

figures and tables.

In a fishing village, there are many producers producing dried shrimp. The dried shrimps are

identical and each producer has only a small market share with no control over the price. Hence

the dried shrimp market can be considered perfectly competitive.

(a) Initially the dried shrimp market is at its long run equilibrium. Examine this situation

with suitable diagrams of the dried shrimp market and a representative producer of dried

shrimp. Discuss the characteristics of the producer at the long run equilibrium.

 

(b) There is a well-reputed medical report suggesting that eating dried shrimp may cause a

harmful disease. Appraise the effect of this report on the dried shrimp market and a

representative producer of dried shrimp in the short run equilibrium. Support your

answers with suitable diagrams of the dried shrimp market and a representative

producer of dried shrimp.

 

ECO202 Group-based Assignment

SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 5 of 5

(c) What will happen to the dried shrimp market and the representative producer’s profit

and output in the long run?

 Examine with suitable diagrams of the dried shrimp market

and a representative producer of dried shrimp. How does this long run equilibrium

differ from (a)? Discuss.