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 Suppose the market price is $17.00 per unit. Will firms enter or exit the industry in the long run? 17.00 ATC If market price is $17.00, then firms will the market in the long run. AVC What effect will firms entering have on the market price? When firms enter, A. market demand will decrease, decreasing price. B. the marginal cost of production will increase, increasing price. O C. the average total cost of production will increase, increasing price. D. market supply will increase, decreasing price. Quantity Price and cost

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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
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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