Consider the following cost curves for Firm X,a perfectly competitive firm.
FIGURE 9- 5
-Refer to Figure 9- 5.If Firm X is producing output Q1 and the market price is P1,
A) Firm X is at its long- run profit- maximizing position.
B) new firms have a profit incentive to enter the industry,building larger plants.
C) Firm X is producing at its minimum efficient scale.
D) there is no lower- cost scale of plant which could be built by Firm X.
E) there are profits to induce increases in output by Firm X,using its existing plant.
Correct Answer:
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