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.Now suppose that 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.Based on the information given, we can conclude that once all of the adjustments to long-run equilibrium have been made, the price of candy canes will equal:
A.$0.05.
B.$0.10.
C.$0.15.
D.The question is impossible to answer without knowing exactly how many firms entered and/or left the industry.

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The Answer of 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.Now suppose that 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.Based on the information given, we can conclude that once all of the adjustments to long-run equilibrium have been made, the price of candy canes will equal:
A.$0.05.
B.$0.10.
C.$0.15.
D.The question is impossible to answer without knowing exactly how many firms entered and/or left the industry.

Suppose That the Market for Candy Canes Operates Under Conditions