Answered: The market for fertilizer is perfectly…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter22: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 6CQ: Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent...

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The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses.

Which of the following statements is true about the price of fertilizer? Check all that apply.

The price of fertilizer must be less than average total cost.

The price of fertilizer must be equal to average variable cost.

The price of fertilizer must be less than marginal cost.

Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply.

Average total cost will decrease.

The quantity supplied by each firm will decrease.

The total quantity supplied to the market will decrease.

Marginal cost will decrease.

The price of fertilizer will increase.

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