Assume the Market for Beef Is Perfectly Competitive

question 289

Multiple Choice

Assume the market for beef is perfectly competitive. Beef producers are currently earning a zero economic profit. If consumers switch from beef to chicken, which of the following is most likely to occur?

• A) Beef producers will now incur economic losses in both the short run and the long run.
• B) Beef producers will incur economic losses in the short run. Some producers will exit the industry until those remaining are earning a zero economic profit.
• C) Beef producers will incur economic losses in the short run. Some producers will exit the industry until those remaining are earning an economic profit.
• D) Beef producers will now earn economic profits in the short run, and there will be no additional adjustments in the long run.

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Definitions:

Seize

To take hold of suddenly and forcibly; in legal terms, it often refers to the act of taking property by authority of law.

Debtor's Property

Assets owned by a debtor that creditors might claim against to satisfy debts.

Social Constructionism

The theory that much of what we understand and know about the world is constructed through social processes and interactions.

Consensual Validation

The process by which people seek affirmation of their own beliefs, attitudes, and values from others who are similar.