Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, and that the price of each candy cane is $0.10. Based on the information given, we can conclude that a typical producer of candy canes is experiencing:

Question

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In long-run equilibrium under perfect competition, firms produce at the minimum point of their average total cost curve, where marginal cost equals marginal revenue. At this point, firms experience diminishing marginal returns to variable factors of production.

Suppose That the Market for Candy Canes Operates Under Conditions