The Market for Sweet Potatoes Consists of 1,000 Identical Firms

question 22

Multiple Choice

The market for sweet potatoes consists of 1,000 identical firms.Each firm has a short-run total cost curve of STC = 100 + 100 q + 100q²,and a short-run marginal cost curve of SMC=100+200q where q is output.Suppose that sunk costs are 75 and non-sunk costs are 25.What is the equation of an individual firm's short-run supply curve?

• A) for P≥100, and q=0 otherwise.
• B) for P≥200, and q=0 otherwise.
• D) for P ≥200, and q=0 otherwise.

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Definitions:

Quantity Theory

A theory in economics that links the price levels and monetary supply, suggesting that changes in the money supply will directly affect price levels over the long term.

Inflationary Recessions

Economic scenarios characterized by stagnant growth and increasing prices, marking simultaneous occurrences of recession and inflation.

Macropolicy-Makers

These are government officials or agencies responsible for making decisions that affect the economy as a whole, focusing on issues like inflation, unemployment, and economic growth.

Treasury Borrowing

The process by which the government raises funds to finance its expenditures by issuing debt securities, such as bonds and treasury bills.