Suppose That for Each Firm in the Competitive Market for Potatoes,long-Run

question 101

Multiple Choice

Suppose that for each firm in the competitive market for potatoes,long-run average cost is minimized at $0.20 per pound when 500 pounds are grown.The demand for potatoes is Q = 10,000/p.If the long-run supply curve is horizontal,then how many pounds of potatoes will be consumed in total?

• A) 0
• B) 500
• C) 10,000
• D) 50,000

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Definitions:

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay to their staff.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.

Borrower

An individual or entity that takes money or property from another under an agreement to return it or its equivalent at a future date.

Creditor

An entity or person to whom money is owed by a debtor for goods supplied or loans given.