Assume that apples are produced in a perfectly competitive market. Grande’s Orchard is a typical firm that grows and sells apples. Currently, Grande earns zero economic profit, and the market price of apples is $10 per bushel. (a) Suppose an increase in the popularity of apple cider increases the demand for apples. How will the increase in the demand for apples affect Grande’s economic profit in the short run? Explain. (b) What will happen to Grande’s economic profit in the long run? Explain.
Assume that apples are produced in a perfectly competitive market. Grande’s Orchard is a typical firm that grows and sells apples. Currently, Grande earns zero economic profit, and the market price of apples is $10 per bushel. (a) Suppose an increase in the popularity of apple cider increases the demand for apples. How will the increase in the demand for apples affect Grande’s economic profit in the short run? Explain. (b) What will happen to Grande’s economic profit in the long run? Explain.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
Problem 5CQ
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Assume that apples are produced in a
(a) Suppose an increase in the popularity of apple cider increases the
(b) What will happen to Grande’s economic profit in the long run? Explain.
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