Exhibit 10-4 -For the Situation Depicted in Exhibit 10-4, What Will Happen

Exhibit 10-4
-For the situation depicted in Exhibit 10-4, what will happen in the long-run?

A) New technology will lower average total costs and increase profits for the firm.
B) Firms will exit this market causing economic profit to increase.
C) Product differentiation will lead to an increase in profitablility.
D) New firms will enter the market driving economic profit to zero.
E) Nothing, the situation will remain the same.