The following question(s) refer(s) to the figure below, which depicts the demand, marginal revenue, and cost curves facing a firm in a competitive price-searcher industry.
Figure 10-14
Refer to Figure 10-14. In the long run, we would expect
A) more firms to enter this industry until zero economic profits are restored.
B) firms to exit this industry until zero economic profits are restored.
C) the number of firms to remain constant and existing firms will continue to suffer economic losses in the long run.
D) the number of firms to remain constant and existing firms will continue to earn economic profits in the long run.
Correct Answer:
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