How will the invisible hand move corn prices in response to:
a. a flood that destroys a great deal of the corn crop?
b. a rise in the price of wheat (a substitute for corn)?
c. a change in consumer tastes away from corn dogs toward hot dogs?
d. an increase in the number of people with access to the corn market?
a. Since a great deal of the corn crop has been destroyed by the flood, the supply curve for corn will shift leftwards and the price of corn will increase.
b. When the price of a substitute such as wheat increases, the demand for corn will increase. The demand curve will shift rightwards and the price of corn will increase.
c. Corn (not surprisingly) is an important input in the production of corn dogs. If consumers prefer fewer corn dogs, the demand curve for corn will shift leftwards and the price of corn will fall.
d. As more buyers enter the market, the demand for corn will increase. The demand curve will shift rightwards and the price of corn will increase.
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In monopolistic competition in the long run, firms
A) make zero economic profit and require more capacity. B) incur an economic loss and require more capacity. C) make an economic profit and have excess capacity. D) make zero economic profit and have excess capacity. E) make an economic profit and require more capacity.
All else equal, as the price of a product falls, the quantity supplied decreases
Indicate whether the statement is true or false