Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, that the price of each candy cane is $0.10, and that the market demand curve is downward sloping. The price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs. Once all of the adjustments to long-run equilibrium have been made, the price of candy canes will equal: $0.05. The question is impossible to answer without knowing exactly how many firms entered and/ or left the industry.. $0.10. $0.15. The question is impossible to answer without knowing exactly how many firms entered and/or left the industry.

Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, that the price of each candy cane is $0.10, and that the market demand curve is downward sloping. The price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs. Once all of the adjustments to long-run equilibrium have been made, the price of candy canes will equal: $0.05. The question is impossible to answer without knowing exactly how many firms entered and/ or left the industry.. $0.10. $0.15. The question is impossible to answer without knowing exactly how many firms entered and/or left the industry.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 13QP

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