ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The figure to the right represents the cost structure for a perfectly competitive
firm with its average total cost (ATC) curve, average variable (AVC) curve, and
marginal cost (MC) curve.
MC
17.00..
Suppose the market price is $17.00 per unit. Will firms enter or exit the industry
in the long run?
ATC
If markot price is $17.00, then firms will
the market in the
AVC
long run.
What effect will firms entering have on the market price?
When firms enter,
O A. market demand will decrease, decreasing price.
B. the marginal cost of production will increase, increasing price.
OC. the average total cost of production will increase, increasing price.
O D. market supply will increase, decreasing price.
Quantity
Price and cost
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Transcribed Image Text:The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve. MC 17.00.. Suppose the market price is $17.00 per unit. Will firms enter or exit the industry in the long run? ATC If markot price is $17.00, then firms will the market in the AVC long run. What effect will firms entering have on the market price? When firms enter, O A. market demand will decrease, decreasing price. B. the marginal cost of production will increase, increasing price. OC. the average total cost of production will increase, increasing price. O D. market supply will increase, decreasing price. Quantity Price and cost
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