As the accountant of Race Co., you have been requested to calculate (a) net sales, (b) cost of merchandise sold, (c) gross profit, and (d) net income from the following: gross sales, $40,000; sales returns, $3,000; beginning inventory, $6,000; net purchases, $8,000; ending inventory, $1,000; operating expenses, $9,200.

(a) Net sales = Gross sales - Sales return

Net sales = $40,000 - $3,000 = $37,000

(b) Cost of merchandise sold = Beginning inventory + Net purchase - Ending inventory

Cost of merchandise sold = $6,000 + $8,000 - $1,000 = $13,000

(c) Gross profit = Net sales - Cost of merchandise sold

Gross profit = $37,000 - $13,000 = $24,000

(d) Net income = Gross profit - Operating expenses

Net income = $24,000 - $9,200 = $14,800

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.