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.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Just a student stuck on this Economic question for awhile. Question in image. 

I appreciate you helping me learn :) 

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.
Transcribed Image Text: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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Taxes And Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education