Suppose that the organic-produce industry is composed of a large number of small firms. In recent years, these firms have suffered economic losses, and many sellers have left the industry. Economic theory suggests that these conditions will
a. shift the demand curve outward so that price will rise to the level of production cost.
b. cause the remaining firms to collude so that they can produce more efficiently.
c. cause the market supply to decline and the price of organic produce to rise.
d. cause firms in the organic-produce industry to suffer long-run economic losses.
c
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An optimal decision is one that chooses the most desirable from among all possibilities that are available.
Answer the following statement true (T) or false (F)
If the cost of variable inputs used in a firm's production process rose, which of the following would not occur?
a. Its AVC curve would shift up. b. Its ATC curve would shift up. c. Its MC curve would shift up. d. Its AFC curve would shift up.
In a particular economy, the price index was 120 in 2012 and 130 in 2013 . Which of the following statements is correct?
a. The economy experienced a rising price level between 2012 and 2013. b. The economy experienced a higher inflation rate between 2012 and 2013 than it had experienced between 2011 and 2012. c. The inflation rate between 2012 and 2013 was 10 percent. d. The base year is 2011.
If government intervention fails to improve economic outcomes, the result is known as:
a) Mixed economy failure. b) Market failure. c) Government failure. d) Laissez faire.