-The Figure Above Shows a Typical Perfectly Competitive Corn Farm

question 107

Multiple Choice

-The figure above shows a typical perfectly competitive corn farm, whose marginal cost curve is MC and average total cost curve is ATC. The market is initially in a long-run equilibrium, where the price is $3.00 per bushel. Then, the market demand for corn decreases and, in the short run, the price falls to $2.50 per bushel. In the new short-run equilibrium, the farm produces ________ bushels of corn and sells corn at ________ per bushel.

• A) 250,000; $3.00
• B) 250,000; $2.50
• C) 300,000; $2.50
• D) 200,000; $2.50

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