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When the Existing Firms in a Competitive Industry Have Different

Question 44

Multiple Choice

When the existing firms in a competitive industry have different operating costs:


A) the highest-cost firm in operation breaks even, while the low cost firms will earn profit.
B) the highest-cost firm in operation breaks even, while the low cost firms leave the industry.
C) the low cost firms earn a larger profit than the high-cost firms.
D) the highest-cost firms will incur a deadweight loss.

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