Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. Suppose demand for wheat is initially D2. If the price of rice (a substitute for wheat) rises, then demand for wheat will shift to ________. This will ________ the equilibrium price of wheat and individual profit-maximizing firms will produce ________ bushels of wheat.
A. D1; decrease; 0
B. D1; increase; 13
C. D3; increase; 15
D. D3; decrease; 10
Answer: C
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A firm will tend to select the least costly input combination to produce its output.
Answer the following statement true (T) or false (F)
Government ownership of monopoly industries is termed
a. economic regulation b. antitrust c. nationalization d. creative destruction e. rule of reason
When quantity demanded responds strongly to changes in price, demand is said to be
a. fluid. b. elastic. c. dynamic. d. highly variable.
How are the monopolistically competitive producer and the monopolist different?
a. The monopolist has zero barriers to entry and exit, but the monopolistically competitive producer has many such barriers. b. The monopolist has an upward-sloping demand curve, but the monopolistically competitive producer has a horizontal demand curve. c. The monopolist can make economic profits in the long run, but the monopolistically competitive producer cannot. d. The monopolist has many competitors, but the monopolistically competitive producer does not.