Poinsettia growing is a perfectly competitive industry and all Growers have the

Question

Poinsettia growing is a perfectly competitive industry and all Growers have the same cost curves. The market Price of poinsettias is $7 a pot and each grower maximize profit by Producing 2,700 pots a week. The average total cost of Producing poinsettias is $15 a pot. minimum average variable cost is $3 a pot, and the minimum average total cost is $7 a pot Because firm in the industry are some firms will the market in the long run The number of Poinsettia growers will A. Incurring an economic loss; exit; decrease B. making an economic profit, exit and some firms will enter, decrease or increase depending on the relative number of exiting and entering forms incurring an economic loss; enter and some firms will exit; increase or decrease depending on the relative number of entering and exiting firms

Explanation / Answer

is Making a economic loss of (15-7)*2700 = $21,600

A Incurrring a economic loss , exit , decrease

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