Assume that the market for cage-free eggs is perfectly competitive. All else equal, as more farmers choose to produce and sell cage-free eggs, what is likely to happen to the equilibrium price of the eggs and profits of these farmers in the long run?
A) The equilibrium price is likely to increase and profits are likely to remain unchanged.
B) The equilibrium price is likely to remain unchanged and profits are likely to increase.
C) The equilibrium price is likely to decrease and profits are likely to decrease.
D) The equilibrium price is likely to increase and profits are likely to increase.
Answer: C
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Refer to Table 1-5. What is Julius's marginal benefit if he decides to stay open for three hours instead of two hours?
A) $15 B) $25 C) $65 D) $80
Why would we be likely to observe dentists engaging in price discrimination?
a. Dental care is expensive. b. All dentists are basically alike. c. It is very important to exercise care in choosing a dentist. d. It is nearly impossible to resell the services of a dentist. e. The demand for dentists is very inelastic.