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.Now suppose that the price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs.Based on
the information given, we can conclude that in the long run we will observe:
A.firms leaving the industry.
B.firms entering the industry.
C.some firms entering and some firms leaving.
D.neither entry nor exit from the industry.

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The Answer of 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.Now suppose that the price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs.Based on
the information given, we can conclude that in the long run we will observe:
A.firms leaving the industry.
B.firms entering the industry.
C.some firms entering and some firms leaving.
D.neither entry nor exit from the industry.

Suppose That the Market for Candy Canes Operates Under Conditions