Consider the following cost curves for Firm X,a perfectly competitive firm.
FIGURE 9-5
-Refer to Figure 9-5.In this industry,which one of the following is FALSE?
A) If the price were to fall below P2,firms would leave the industry.
B) If the price were to rise above P2,new firms would enter the industry.
C) If the scale of Firm X at output Q2 and price P2 is large enough that Firm X has an appreciable share of the market,Firm X will no longer be a price taker.
D) At output Q2 and price P2,Firm X is maximizing its long-run profits.
E) Only one firm can reach the size of output Q2.
Correct Answer:
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