Suppose the Wheat Industry Is in Long-Run Equilibrium,so That Farmers

question 104

Multiple Choice

Suppose the wheat industry is in long-run equilibrium,so that farmers are earning a normal rate of return.Suppose the farmers are able to convince the Congress to provide a minimum price for wheat that is above the equilibrium price.The result would be:

• A)deadweight losses in the long run -higher costs to consumers and no more profits to farmers.
• B)deadweight losses in the short run -higher costs to consumers and no more profits to farmers.
• C)increase in economic efficiency in the long run.
• D)increase in economic efficiency in the short run.
• E)an increase in economic rents in the long run.

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