The Apple Market Is Perfectly Competitive and Is in Long-Run

question 222

Multiple Choice

The apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 percent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit. In the long run, the ________.

• A) increases; zero; price of apples will return to their original level
• B) remains the same; zero; orchards will be replanted and growers will make normal profits
• C) increases; zero; orchards will be replanted and economic profit will return to zero
• D) increases; positive; orchards will be replanted and economic profit will return to zero

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Definitions:

Formally Binding Agreement

A contract or agreement recognized by law, which obligates involved parties to fulfill specified conditions and may involve penalties for non-compliance.

Politically Self-Governing

Refers to an entity or group that exercises autonomous control over its governance without external interference.

Holocaust

The systematic, state-sponsored persecution and murder of six million Jews by the Nazi regime and its allies and collaborators before and during World War II.

Band Society

A small, loosely organized group of hunter-gatherers who work together and share resources, usually consisting of 20-50 individuals.