Consider the perfectly competitive market for peaches, with identical firms and the usual shaped cost curves. Land is a fixed cost in the long and short run. You notice that in the long run the prices of peaches has stayed the same, but the number of firms has increased. What could explain this? A Market demand has increased. B Market demand has decreased. C The cost of land used in peach production increases. D The cost of land used in peach production decreases. E Marginal Cost increases.

Consider the perfectly competitive market for peaches, with identical firms and the usual shaped cost curves. Land is a fixed cost in the long and short run. You notice that in the long run the prices of peaches has stayed the same, but the number of firms has increased. What could explain this? A Market demand has increased. B Market demand has decreased. C The cost of land used in peach production increases. D The cost of land used in peach production decreases. E Marginal Cost increases.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.1P

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