Assume the market for beef is perfectly competitive. Beef producers are currently earning a zero economic profit. If consumers switch from chicken to beef, which of the following is most likely to occur?
A. Beef producers will now earn economic losses in the short run, and there will be no additional adjustments in the long run.
B. Beef producers will now incur economic profits in both the short run and the long run.
C. Beef producers will incur economic profits in the short run. Some producers will enter the industry until all firms in the industry are earning a zero economic profit.
D. Beef producers will incur economic profits in the short run. Some producers will enter the industry as long as all firms in the industry are earning an economic profit.
Answer: C
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A) 0.09. B) 0.20. C) 0.80. D) 0.91.
The organization responsible for the conduct of monetary policy in the United States is the
A) Comptroller of the Currency. B) U.S. Treasury. C) Federal Reserve System. D) Bureau of Monetary Affairs.
The higher the concentration ratio, the
a. more control an individual firm has to set prices. b. more competitive the industry. c. less competitive the industry. d. Both a and c are correct.
When the selling price of a good rises (goes up), what is the relationship to the quantity supplied?
a. The profit made on each item goes down. b. It becomes practical to produce more goods. c. The cost of production goes down. d. There is no relationship between the two.