-The Figure Above Shows a Typical Perfectly Competitive Corn Farm

question 208

Multiple Choice

-The figure above shows a typical perfectly competitive corn farm, whose marginal cost curve is MC and average total cost curve is ATC. The market is initially in a long-run equilibrium, where the price is $3.00 per bushel. Then, the market demand for corn decreases and, in the short run, the price falls to $2.50 per bushel. In the long run, the price of corn is ________ and a typical farm produces ________ bushels of corn.

• A) $2.00; 200,000
• B) $3.50; 250,000
• C) $2.50; 250,000
• D) $3.00; 300,000

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