Refer to the information provided in Figure 9.2 below to answer the question(s) that follow. a. The industry b. A representative firm MC ATC AVC 10 12 13 15 Bushels of wheat Bushels of wheat Figure 9.2 Price per bushel ($) 915
35) Refer to Figure 9.2. In which of the following
A) $5-$6 B) $6-$7 C) $7-$8 D) $8-$9
36) Refer to Figure 9.2. Suppose demand for wheat is initially D2. If the price of rice (a substitute for wheat) falls,
then demand for wheat will shift to ________. This will ________ the
profit-maximizing firms will produce ________ bushels of wheat.
A) D1; increase; 13 B) D3; decrease; 10 C) D3; increase; 15 D) D1; decrease; 0
37) Refer to Figure 9.2. If demand for wheat is D3, then a profit-maximizing firm will produce ________ units and
earn ________.
A) 12; negative profits B) 15; positive profits
C) 9; positive profits D) 13; exactly a normal return
38) Refer to Figure 9.2. If demand for wheat is D1, then in the long run
A) firms will increase their output so that their average fixed cost per unit falls.
B) the firm will increase its price and output.
C) the firm will exit the industry.
D) new firms will enter the industry, and the current firms will expand production.
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