
-The figure above shows the costs for the typical grower in the perfectly competitive turnip market. Currently, the price of a ton of turnips is $1,200. The demand for turnips increases permanently. The turnip industry experiences neither external economies nor external diseconomies. In the long run, the price of a ton of turnips
A) increases so it is above $1,200.
B) is $1,200 and turnip growers will make normal profit.
C) decreases so it is below $1,200, and turnip growers will make normal profit.
D) decreases so it is below $1,200 and the turnip growers make an economic profit.
Correct Answer:
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Q320: Suppose firms in a perfectly competitive market
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