Suppose That the Firms in the Perfectly Competitive Oat Industry

question 116

Multiple Choice

Suppose that the firms in the perfectly competitive oat industry currently are receiving a price of $2 per bushel for their product. The minimum possible average total cost of producing oats in the long run is $1 per bushel. It follows that:

• A) the oat industry is in equilibrium.
• B) new firms will enter the oat industry.
• C) the price of oats will remain at $2 per bushel in the long run.
• D) firms in the oat industry will earn economic profits in both the long run and the short run.

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Definitions:

Third Party

An individual or group besides the two parties primarily involved in a transaction or agreement.

Partnership Matter

Refers to any legal, financial, or operational issue or activity that involves or affects a business partnership.

Withdraws

The act of removing funds from a bank account or retracting from a commitment, position, or engagement.

Expiration Date

The specified date after which a product, service, or contract is no longer valid or effective.