Proud corporation acquired 80 percent of spirited company’s voting stock on january 1, 20x3, at underlying book value. the fair value of the noncontrolling interest was equal to 20 percent of the book value of spirited at that date. assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. proud uses the equity method in accounting for its ownership of spirited. on december 31, 20x4, the trial balances of the two companies are as follows:

answer; risk transference;

answer; a set of mutual funds with similar risk characteristics to your mutual fund;

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.