Suppose That the Market for Candy Canes Operates Under Conditions

question 183

Multiple Choice

Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, and that the price of each candy cane is $0.10. Based on the information given, we can conclude that the marginal cost of producing candy canes:

• A) is less than $0.10.
• B) equals $0.10.
• C) is greater than $0.10.
• D) It is not possible to answer based on the information given.

---

Definitions:

Fixed Number

A specific, unchanging quantity that does not vary under different conditions or over time.

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that producers are willing to supply at those prices.

Short-Run Elasticity

Refers to the responsiveness of the quantity demanded or supplied of a good or service to a price change over a short period.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specific period.