The graph shown displays the cost curves for a firm in a perfectly competitive market. Assume that all firms in this market have identical cost structures. If the market price is initially $5, which of the following statements is true? In the long run, the market demand curve will decrease.This firm should produce in the short run but exit in the long run.In the long run, the market price will be $7.

Question

The graph shown displays the cost curves for a firm in a perfectly competitive market. Assume that all firms in this market have identical cost structures. If the market price is initially $5, which of the following statements is true?  In the long run, the market demand curve will decrease.This firm should produce in the short run but exit in the long run.In the long run, the market price will be $7.

Quizplus · Accepted Answer

The Answer of The graph shown displays the cost curves for a firm in a perfectly competitive market. Assume that all firms in this market have identical cost structures. If the market price is initially $5, which of the following statements is true?  In the long run, the market demand curve will decrease.This firm should produce in the short run but exit in the long run.In the long run, the market price will be $7.

The Graph Shown Displays the Cost Curves for a Firm