Refer to the Information Provided in Figure 12

question 110

Multiple Choice

Refer to the information provided in Figure 12.4 below to answer the question(s) that follow. Figure 12.4
There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S^{0 and D0.}
-Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, firms in sector X are now ________ and firms in sector Y are now ________.

• A) breaking even; suffering losses
• B) earning profits; breaking even
• C) earning profits; suffering losses
• D) breaking even; breaking even

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Definitions:

Clayton Act

A U.S. antitrust law, passed in 1914, aimed at promoting competition and preventing monopolies by addressing specific practices not covered by the Sherman Act.

Treble Damages

A form of punitive damages awarded in a legal case that are three times the amount of actual compensatory damages.

Civil Actions

Legal proceedings initiated by individuals or entities (aside from the state) to seek relief or damages from another party.

Sherman Act

A foundational antitrust law in the United States aimed at promoting competition and restricting monopolistic practices.