Competitive firms want to enter industries in which: A) P = MC. B) P AC. D) P

Name: Competitive firms want to enter industries in which: A) P = MC. B) P AC. D) P < MC.
Brand: Quizplus
Rating: 4.9 (39 reviews)

Question

Competitive firms want to enter industries in which:
A) P = MC.
B) P < AC.
C) P > AC.
D) P < MC.

Quizplus · Accepted Answer

Competitive firms want to enter industries where the price (P) is greater than the average cost (AC). This is because if the price is below average cost, firms will experience losses in the long run. By entering industries where the price is above average cost, firms can earn profits and stay in the market in the long run.

Competitive Firms Want to Enter Industries in Which