(a) Harket (b) Firn LRMC 2 MC1 ATC, ATC3 1 3 2 l P TC 2 H HR Quantity Quantity B
ID: 1121841 • Letter: #
Question
(a) Harket (b) Firn LRMC 2 MC1 ATC, ATC3 1 3 2 l P TC 2 H HR Quantity Quantity Based on the figure above, which of the following statements is true about this compctitive industry in the long run? a. The market supply curve will be S3 and all firms will opcratc at a b· The market supply curve will bc S3 and only those firms operating c· The market supply curve will be Si and only those firms operating d. The market supply curve will be S2 and firms will be forced to e. All firms will go out of busincss and the industry will cease to plant size of ATC1. with a very large plant size will earn an cconomic profit. at plant size ATC2 will survive. operate with plant sizes of ATC3. existExplanation / Answer
Answer
Option d
the long run price is equal to the minimum of ATC or LMC=ATC
the firm's with min(LATC) will survive in the long run and the here min(ATC2)=min(LATC)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.