A Perfectly Competitive Wheat Farmer in a Constant-Cost Industry Produces

question 61

Multiple Choice

A perfectly competitive wheat farmer in a constant-cost industry produces 3,000 bushels of wheat at a total cost of $36,000.The prevailing market price is $15.What will happen to the market price of wheat in the long run?

• A)The price remains constant at $15.
• B)The price falls to $12.
• C)The price rises above $15.
• D)There is insufficient information to answer the question.

---

Definitions:

Professional Association

An organization seeking to further a particular profession, the interests of individuals engaged in that profession, and the public interest.

Horizontal Merger Guidelines

Guidelines issued by the U.S. Federal Trade Commission and the Department of Justice that evaluate the potential anti-competitive effects of horizontal mergers.

Herfindahl-Hirschman Index

An economic measure used to evaluate the level of competition within an industry, calculated by squaring the market share of each firm competing in the market and summing the resulting numbers.

National Cooperative Research Act

A U.S. federal law enacted in 1984 to promote innovation and competitiveness by offering certain antitrust protections to companies engaged in joint research and development efforts.