If concerns about mad-cow disease impose economic losses on the perfectly competitive cattle ranchers, exit by the ranchers combined with no further changes in the demand for beef will force the price of beef to
A) decrease.
B) not change.
C) increase.
D) fluctuate, with the trend being lower prices.
E) probably change, but more information about the market supply of beef is needed to answer the question.
C
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Which of the following is a transfer payment?
A) Social Security payments B) the food stamp program C) a tax deduction D) an income tax credit
The excess of the nominal interest rate over the TIPS interest rate is known as the
A) interest-rate differential. B) break-even inflation rate. C) yield spread. D) term structure.
The more sensitive people are to a change in price, the
A) greater a change in price must be to induce a certain change in quantity demanded. B) greater is the price elasticity of demand. C) smaller the price elasticity of demand. D) closer the price elasticity of demand is to one.
A book that sells new for $100 will typically sell used for around
A. $100. B. $75. C. $50. D. $25.