ECON-102-Fall-2012-Exam-3-Version_A_and_C

Based on the information given we can conclude that

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: idebooks e. shut down 17. A competitive firm operating in the short run is maximizing profits and just breaking even. Its costs include a monthly license fee of $100 that is imposed by the state and must be paid for as long as the firm is in existence. The license fee is now raised to $150. To continue to maximize profits in the short run, the firm should: a. increase price. b. increase output. c. reduce output. d. not change output. 5 ECON 102 NAME: _______________________ FALL 2012 EXAM- 3 VERSION A 18. Zoe's Bakery operates in a perfectly competitive industry. The variable costs at Zoe's Bakery increase. The demand for Zoe's pastries does not change, nor does the firm shut down. Hence, Zoe's Bakery will ________ its price and ________ its level of production. a. raise; increase b. decrease; increase c. raise; decrease d. not change; decrease 19. The market for beef is in long- run equilibrium at a price of $3.25 per pound. The announcement that mad cow disease has been discovered in the United States reduces the demand for beef sharply, and the price falls to $2.00/pound. If the long- run supply curve is horizontal, then when long- run equilibrium is reestablished the price will be: a. $3.25 per pound. b. $2 per pound. c. g...
View Full Document

Ask a homework question - tutors are online