Suppose wheat farmers are price takers. If wheat farmers are currently making economic profits, over time we would expect that
a. existing wheat farmers would plant more acres of wheat.
b. farmers growing other crops would switch some of their land from these crops to the growing of wheat.
c. the wheat farmers will continue to earn economic profits because they would be driven out of business without such profit.
d. both a and b are correct.
D
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A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if
A) it can lobby the government to establish a price floor for its product. B) it can find new ways to differentiate its product. C) it can move to another country where there is less competition. D) it can successfully sue its competitors for copyright infringement.
A bank has $50,000 in excess reserves and the required reserve ratio is 10 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in (total) reserves
A) $500,000; $90,000 B) $100,000; $20,000 C) $50,000; $25,000 D) $250,000; $75,000