Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at 20¢ per pound when 500 pounds are grown. The demand for potatoes is Q = 10,000/p
If the long-run supply curve is horizontal, then how many firms will this industry sustain in the long run? A) 0
B) 100
C) 50,000
D) There is not enough information to answer.
B
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An agreement that gives one party the right to buy or sell from or to another part a specified quantity of currency at a specified price would be include in which of the following.
A) an option B) a spot contract C) a forward contract D) a swap
The reason why firms in perfect competition do not advertise is because
a. their demand curves are all downward sloping and if they sell more it would have to be at a lower price b. they differentiate themselves, as with milk c. they are typically small in size and cannot produce for a wider market d. there is no entry into the industry e. there is no product differentiation among the goods produced