If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will
A) have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price.
B) have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line.
C) decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward.
D) reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward.
C
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In the classical model, a temporary decrease in government spending would cause a decrease in
A) output, the real interest rate, real wages, and the price level. B) employment, the real interest rate, real wages, and the price level. C) output, employment, the real interest rate, and the price level. D) output, employment, real wages, and the price level.
According to the assignment rule, which of the following policy mixes is appropriate for a country with high inflation, a balance of payments deficit, and fixed exchange rates?
A. Contractionary fiscal policy and contractionary monetary policy B. Expansionary fiscal policy and contractionary monetary policy C. Contractionary fiscal policy and expansionary monetary policy D. Expansionary fiscal policy and expansionary monetary policy