Suppose a perfectly competitive firm,which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees.In the short run,which of the following will occur?
A) ATC will shift up and MC will shift down, causing the firm to incur a loss.
B) ATC will shift down and MC will shift up, causing the firm to earn a positive economic profit.
C) ATC and MC will shift down, causing the firm to earn a positive economic profit.
D) ATC and MC will shift up, causing the firm to incur a loss.
Correct Answer:
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