Lilly Is the Price-Taking Owner of an Apple Orchard

question 224

Multiple Choice

Lilly is the price-taking owner of an apple orchard.The price of apples is high enough that Lilly is earning positive economic profits.In the long run,Lilly should expect _____ apple prices due to the _____ firms.

• A)lower;entry of new
• B)higher;exit of existing
• C)lower;exit of existing
• D)higher;entry of new

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Definitions:

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services without wasting any resources.

Competitive Forces

Pressures or influences that affect an organization's ability to compete in a market, including rivalry among existing competitors, the threat of new entrants, and bargaining power of customers and suppliers.

Market Allocation

A method of distributing goods and services among buyers and sellers wherein prices are determined by supply and demand forces in the market.

Regulatory Agencies

Governmental bodies responsible for overseeing, implementing, and enforcing laws and regulations within specific sectors.