The Markets for Renewable and Nonrenewable Resources Operate to Ensure

question 36

Multiple Choice

The markets for renewable and nonrenewable resources operate to ensure that:

• A)the producers using these resources earn above-normal profits even in the long run.
• B)the current and future prices of such resources remain high.
• C)the cost of extraction of such resources increase with increase in price.
• D)the current price of such resources should remain low but the future prices should increase to increase profitability of the producers.
• E)the current and future wants for these resources are satisfied in the least costly manner.

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Definitions:

Price Control

Government-imposed limits on the prices that can be charged for goods and services in the market, usually aimed at curbing inflation or protecting consumers.

Profit-Maximizing Quantity

The level of production at which a business achieves the highest amount of profit, where marginal revenue equals marginal cost.

Economic Profit

Economic profit is the difference between total revenue and total costs, including both explicit and implicit costs.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or output in the short term.