Suppose That the Market for Candy Canes Operates Under Conditions

question 49

Multiple Choice

Suppose that the market for candy canes operates under conditions of perfect competition,that it is initially in long-run equilibrium,that the price of each candy cane is $0.10,and that the market demand curve is downward sloping.The price of sugar rises,increasing the marginal and average total costs of producing candy canes by $0.05.In the short run,a typical producer of candy canes will be making:

• A)an economic profit.
• B)zero economic profit.
• C)negative economic profit.
• D)The answer is impossible to determine from the information given.

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Definitions:

Simple Tasks

Tasks that are straightforward and uncomplicated, requiring minimal effort or skill to complete.

Distracted

A state of divided attention, where focus is drawn away from the primary task or subject of interest towards unrelated thoughts or activities.

Larger Portions

Serving sizes that are significantly bigger than standard or recommended amounts, often linked to overconsumption and health issues.

Groups

Collections of individuals who come together to achieve a common goal or share a common interest.