me long run? a. Because the price is below the firm's average variable costs, the firms will shut down. b. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. c. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. d. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.

me long run? a. Because the price is below the firm's average variable costs, the firms will shut down. b. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. c. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. d. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?

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