More farmers have recently entered the corn industry. In addition there has been a technological advancement in the fertilizer industry providing corn farmers with a cheaper and a more effective fertilizer. In the market for corn, the effects these
changes will have on the equilibrium price and quantity are
A) price will increase, and quantity will decrease.
B) price will increase, and the effect on quantity is indeterminate.
C) price will decrease, and quantity will increase.
D) price will decrease, and the effect on quantity is indeterminate.
Answer: C
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. The total deadweight loss would be
A) $0. B) $10. C) $15. D) $20.
An important reason why diseconomies of scale arise is because firms may have to hire lower-skilled workers as firms expand
Indicate whether the statement is true or false
When the dollar depreciates,
A) exports will increase and U.S. consumers benefit. B) imports will increase and U.S. consumers benefit. C) exports will decrease and U.S. exporters benefit. D) exports will increase and U.S. exporters gain.