A perfectly competitive wheat farmer in a constant-cost industry produces 3,000 bushels of wheat at a total cost of $36,000. The prevailing market price is $15. What will happen to the market price of wheat in the long run?
A) The price remains constant at $15.
B) The price falls to $12.
C) The price rises above $15.
D) There is insufficient information to answer the question.
Answer: B
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Arbitrage opportunities exist when uncovered interest rate parity does not hold
Indicate whether the statement is true or false
A price discriminating monopolist having identical costs in two separated markets should charge a higher price in that market:
a. which has a higher demand. b. which has a more elastic demand. c. which has a less elastic demand. d. which has a higher marginal revenue.
Whatever else you learned about profit-maximization, you should have learned this: Maximum profit is obtained at the production level where
a. P = AC b. TR = TC c. MR = AR d. MR = MC e. TR = MR
The U.S. antitrust laws
A) aid monopolies in their quest to dominate the market for a good or service. B) are outdated and rarely used anymore. C) promote competition. D) are administered by the Department of Commerce.