Suppose Ethanol Is Produced in a Perfectly Competitive Market

question 4

Multiple Choice

Suppose ethanol is produced in a perfectly competitive market.If a subsidy is paid to ethanol producers,the ethanol producers' profit will ________.

• A) increase in the short run but reduce to zero in the long run
• B) increase in the short run and in the long run
• C) increase in the short run but become negative in the long run
• D) decrease in the short run but reduce to zero in the long run

---

Definitions:

Territorial Expansion

The process by which a country increases its land and influence, often through colonization or the acquisition of territories from other countries.

Slave Women

Female individuals who were subjected to slavery, historically denied personal freedom and forced to work without compensation.

Spanish Rule

pertains to the historical period when Spain governed territories around the world, including parts of the Americas, through a system of viceroys and colonial administration.

Legal Equality

The principle that all individuals must be treated equally by the law, without any discrimination.