Suppose that the price of wheat is above its equilibrium price. You would expect to see
A) a shortage on the market that causes prices to increase further.
B) an increase in quantity demanded because of the high price.
C) a leftward shift of the demand curve because of the high price.
D) sellers begin to lower their prices because of the surplus of wheat.
Answer: D
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Long-run average cost is never greater than short-run average cost because in the long run
A) capital costs equal zero. B) the firm can move to the lowest possible isocost curve. C) wages always increase over time. D) wages always decrease over time.
Refer to the data. If the market price for this firm's product is $68.10, it will produce:
A. 8 units at an economic profit of zero.
B. 6 units at a loss of $90.
C. 9 units at an economic profit of $281.97.
D. 8 units at an economic profit of $130.72.