quot;Shelly Acres, whose grandmother gave her a family recipe for making pies, loved to cook so she decided to start a business she called Mrs....

"Shelly Acres, whose grandmother gave her a family recipe for making pies, loved to cook so she decided to start a business she called Mrs. Acres Homemade Pies. The company produces specialty pies and sells them in local supermarkets and select family restaurants. In each of the first six months, Shelly and three part time employees sold 2,000 pies for $4.50 each, netting a profit of $1.50 per pie. The pies were quite successful and Shelly could not keep up with demand. The company's success results from a quality product and productive employees who are motivated by incentives and who enjoy being part of a successful new business. To meet demand, Shelly expanded operations, borrowing money and increasing staff to four full-time employees. Production and sales increased to 8,000 pies per month, and profits soared to $12,000 per month. However, demand for Mrs. Acres Homemade Pies continues to acelerate beyond what Shelly can supply. She has several options: (1) maintain current production levels and raise prices; (2) expand the facilty and staff while maintaining the current price; or (3) contract the production of the pies to a national restaurant chain, giving Shelly a percentage of profits with minimal involvement.Given the business situation of Mrs. Acres Homemade Pies (p. 30) and using the economic concepts of supply and demand, explain § Discuss what you think will happen to the supply, demand and price of the product in the short-term; § Discuss what you think will happen to supply, demand and price of the product in the long-term. § Explain why you think supply, demand, or equilibrium price will be different, if at all, in the short-term and the long-term. o Select one of the following businesses: "