3 Output, Price, and Profit in the Short Run

question 397

Multiple Choice

3 Output, Price, and Profit in the Short Run
-If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will

• A) have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price.
• B) have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line.
• C) decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward.
• D) reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward.

Recognize the significance of conveying business weaknesses and strategies to overcome them.

Differentiate between the Business Model Canvas and more traditional business planning documents.

Recognize the value of planning and forecasting for businesses of all sizes.

Understand the role of planning in identifying the need, vision, and direction for a business.

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Definitions:

Capital Budgeting

The process of planning and managing a company's long-term investments in major assets.

Investment Required

The total amount of capital needed to undertake a specific project, purchase, or investment.

Project Profitability Index

A calculation used to determine the relative profitability of a project by dividing the present value of future cash flows by the initial investment cost.

Salvage Recovered

The amount of money or value received from selling off the remains of assets after their useful life is over or after a casualty loss.