Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Question 3 Of 20
Luis and Sarah just purchased a piece of land and a tractor. They plan to start growing and selling organic peas.
They have heard that the market for organic peas is perfectly competitive.
What does that mean in terms of long-run profit?
Firms will earn zero economic profit in the long run.
Firms will earn positive economic profits in the long run.
Firms will earn zero accounting profit in the long run.
Firms will earn negative economic profits in the long run.
Luis and Sarah want to know the quantity they should produce to maximize profit. As their economic advisor, you
recommend that they
O produce until marginal revenue is equal to price.
produce as much as possible, regardless of cost.
produce until marginal cost is equal to marginal revenue.
produce until price falls below the average variable cost.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1b551779-a94f-4658-8ab9-cb1269496a60%2Fa4b360f7-deee-4a13-a314-5fe25eccf38d%2F36pwsxg_processed.png&w=3840&q=75)
Transcribed Image Text:Question 3 Of 20
Luis and Sarah just purchased a piece of land and a tractor. They plan to start growing and selling organic peas.
They have heard that the market for organic peas is perfectly competitive.
What does that mean in terms of long-run profit?
Firms will earn zero economic profit in the long run.
Firms will earn positive economic profits in the long run.
Firms will earn zero accounting profit in the long run.
Firms will earn negative economic profits in the long run.
Luis and Sarah want to know the quantity they should produce to maximize profit. As their economic advisor, you
recommend that they
O produce until marginal revenue is equal to price.
produce as much as possible, regardless of cost.
produce until marginal cost is equal to marginal revenue.
produce until price falls below the average variable cost.
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