Suppose That for Each Firm in the Competitive Market for Potatoes,long-Run

question 36

Multiple Choice

Suppose that for each firm in the competitive market for potatoes,long-run average cost is minimized at 20¢ per pound when 500 pounds are grown.If the long-run supply curve is horizontal,then

• A)some firms will enjoy long-run profits because they operate at minimum average cost.
• B)the long-run price will be 20¢ per pound.
• C)each consumer will purchase $100 worth of potatoes.
• D)the long-run price will be set just above 20¢ per pound.

---

Definitions:

Positive Gain

An increase in value or beneficial results obtained from a certain action or investment.

Business Operation

Refers to the day-to-day activities and responsibilities involved in running a business.

Marketing Effort

The combined activities and strategies used by a company to market its products or services and achieve its marketing objectives.

SWOT Analysis

A strategic planning tool that evaluates the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.