Suppose That the Market for Candy Canes Operates Under Conditions

question 227

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 cost of producing candy canes by $0.05;there are no other changes in production costs.In the long run,we will observe:

• A)firms leaving the industry.
• B)firms entering the industry.
• C)some firms entering and some firms leaving.
• D)neither entry to nor exit from the industry.

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Definitions:

Inducible Operon

A cluster of genes in bacteria that is turned on (or induced) in response to the presence of a specific substrate, allowing the bacteria to adapt to environmental changes.

Repressible Operon

A regulatory mechanism in genetics where the presence of a certain substance inhibits gene transcription, typically found in prokaryotic organisms.

Lactose Operon

A cluster of genes in bacteria that encodes enzymes responsible for the metabolism of lactose, regulated by the availability of this sugar.

Tryptophan Operon

A group of genes that are regulated together, involved in the biosynthesis of the amino acid tryptophan in bacteria.