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 falls to $12.
B) The price rises above $15.
C) The price remains constant at $15.
D) There is insufficient information to answer the question.
A
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If the market demand curve does not capture all of the benefits to society of buying an additional unit of good, then:
A. the allocation of resources will be socially optimal. B. the market equilibrium will not be efficient. C. the market equilibrium will be socially optimal. D. the market will not be in equilibrium.
A tax is progressive if the ratio of taxes to income rises as income rises.
Answer the following statement true (T) or false (F)
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?
A. Comparative advantage doesn't exist in this scenario. B. The United States has a comparative advantage in the production of shoes. C. Canada has a comparative advantage in the production of shoes. D. Both countries have a comparative advantage in the production of shoes.
Explain the relationship between price elasticity of demand and total revenue
What will be an ideal response?