1. **Problem Statement:** We analyze the impact of a surge in demand for apples due to a new organic apple juice drink on the short-run and long-run supply curves in a perfectly competitive market. 2. **Initial Setup:** - Demand curve $D$ shifts right due to increased demand. - Short-run supply curve $S_{SR}$ and long-run supply curve $S_{LR}$ represent supply before the demand increase. 3. **Short-Run Effect:** - The increase in demand shifts the demand curve $D$ rightward. - In the short run, the supply curves $S_{SR}$ and $S_{LR}$ remain fixed. - The new equilibrium price rises, causing existing farmers to increase production along $S_{SR}$. 4. **Long-Run Effect:** - Higher prices attract new farmers, increasing supply. - The long-run supply curve $S_{LR}$ shifts right (or the quantity supplied increases at the same price). - The market moves back to long-run equilibrium where price equals minimum average total cost (ATC). 5. **Equilibrium Condition in Long Run:** - In perfect competition, firms produce where marginal cost (MC) equals average total cost (ATC) and price. - This implies $MC = ATC = P$. - Firms make zero economic profit in the long run. 6. **Answer to the Options:** - Farmers will produce at $MC = ATC$. - They will make zero accounting profit (economic profit). **Summary:** - Demand curve shifts right. - Short-run supply fixed; price rises. - Long-run supply adjusts; price returns to minimum ATC. - Firms produce at $MC = ATC$ and earn zero economic profit.