The Diagram Below Shows the (Hypothetical)demand and Supply Curves for Regional

question 99

Multiple Choice

The diagram below shows the (hypothetical) demand and supply curves for regional jets in Canada.Assume that the market is competitive,all jets are identical,and that Canada engages in international trade. FIGURE 32-6 Refer to Figure 32-6.If the world price of a regional jet is $35 million,Canada will

• A)neither import nor export any jets.
• B)import 60 jets per year.
• C)import 20 jets per year.
• D)export 80 jets per year.
• E)export 20 jets per year.

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Definitions:

LRAC Curve

The Long Run Average Cost curve shows the lowest possible average cost of production at different levels of output when all inputs are variable.

Entry

The act or process of entering into a market as a new supplier or producer, often facing barriers such as high startup costs or regulations.

Breaks Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Short Run

A time period during which at least one input, like plant size or capital, is fixed and cannot be changed, focusing on immediate operational decisions.