Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price. Assume the price support is located at the minimum point on the farmer's ATC curve. If this support is eliminated, Farmer Sanchez may do all of the following except
A. Shut down in the short run if price is below the minimum AVC.
B. Increase production.
C. Leave the market.
D. Reduce costs by investing in new technology.
Answer: B
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Economists point out that scarcity confronts
A) neither the poor nor the rich. B) the poor but not the rich. C) the rich but not the poor. D) both the poor and the rich.
The change in the quantity demanded of any good is always caused by:
a. a change in consumers' preferences for that good. b. a change in the general income levels of the consumers who buy that good. c. an increase or decrease in the population. d. a change in the price of that good. e. a change in the price of substitute goods.
If a company owns plants at various stages of the production process, this is called:
A. a multiplant firm. B. a conglomerate. C. a vertically integrated firm. D. an industry.
The possibility that the economy may benefit from having market power, rather than being very competitive, is closely identified with which famous economist?
A) Arnold Harberger B) Joseph Schumpeter C) Sergey Brin D) Donald Turner