Assume the Market for Beef Is Perfectly Competitive

question 252

Multiple Choice

Assume the market for beef is perfectly competitive. Beef producers are currently earning a zero economic profit. If consumers switch from chicken to beef, which of the following is most likely to occur?

• A) Beef producers will now incur economic profits in both the short run and the long run.
• B) Beef producers will incur economic profits in the short run. Some producers will enter the industry until all firms in the industry are earning a zero economic profit.
• C) Beef producers will incur economic profits in the short run. Some producers will enter the industry as long as all firms in the industry are earning an economic profit.
• D) Beef producers will now earn economic losses in the short run, and there will be no additional adjustments in the long run.

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Definitions:

Collect Proceeds

To receive payment or benefits, typically from an insurance policy, investment, or similar financial sources.

Insurance Policy

A contract between an insurer and a policyholder that defines the terms of insurance coverage, including the obligations, liabilities, and benefits.

Fraud

The wrongful or criminal deception intended to result in financial or personal gain.

Insurer

A company that provides financial protection against specific risks to individuals or entities in exchange for premiums.