Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at $0.20 per pound when 500 pounds are grown. The demand for potatoes is Q = 10,000/p. If the long-run supply curve is horizontal, then how many pounds of potatoes will be consumed in total?
A) 0
B) 500
C) 10,000
D) 50,000
D
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If the price of one good increases, and as a result the demand for another good increases, the goods are
A) substitutes. B) normal goods. C) complements. D) inferior goods.
In the short run, a federal budget deficit will most likely _____
a. stimulate aggregate supply b. reduce federal debt c. boost economic growth d. reduce national saving e. boost domestic saving
Increases in the prices of services due to improvement in its quality indicate a(n) _____
a. decline in productivity. b. decline in real GDP. c. increase in output. d. decline in manufacturing output. e. increase in technological progress.
Refer to Figure 4-1. If the market price is $2.50, what is the consumer surplus on the third ice cream cone?
A) $0 B) $0.50 C) $1.50 D) $2.50