For the perfectly competitive broccoli producers in California, the market demand curve for broccoli is
A) a horizontal line.
B) downward sloping.
C) nonexistent.
D) upward sloping.
E) the same as the demand curve each firm faces.
B
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In a perfectly competitive market that is in long-run equilibrium, a permanent leftward shift in the market demand curve
A) raises the price in the short run. B) raises profits in the short run. C) leads to new firms entering the market in the long run. D) lowers the price at first but then raises it as firms leave the market.
Refer to Figure 13-17. Suppose the firm is currently producing Qf units. What happens if it increases its output to Qg units?
A) It will move from a zero profit situation to a loss situation B) Its average cost of production will fall and its profit will rise. C) It will move from a zero profit situation to a profit situation D) It will be taking advantage of economies of scale and will be able to lower the price of its product.