Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, and that the price of each candy cane is $0.10. Based on the information given, we can conclude that the marginal cost of producing candy canes:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms will produce at the point where marginal cost equals price in the long run equilibrium. Since the price of each candy cane is $0.10, and the market is in long-run equilibrium, it can be concluded that the marginal cost of producing each candy cane equals $0.10. Therefore, the correct answer is B.

Suppose That the Market for Candy Canes Operates Under Conditions