Figure 12-11

-Refer to Figure 12-11.Suppose the prevailing price is $20 and the firm is currently producing 1,350 units.In the long-run equilibrium
A)there will be fewer firms in the industry and total industry output decreases.
B)there will be more firms in the industry and total industry output increases.
C)there will be fewer firms in the industry but total industry output increases.
D)there will be more firms in the industry and total industry output remains constant.

Question

Figure 12-11
 
-Refer to Figure 12-11.Suppose the prevailing price is $20 and the firm is currently producing 1,350 units.In the long-run equilibrium
A)there will be fewer firms in the industry and total industry output decreases. 
B)there will be more firms in the industry and total industry output increases. 
C)there will be fewer firms in the industry but total industry output increases. 
D)there will be more firms in the industry and total industry output remains constant.

Quizplus · Accepted Answer

In the long-run equilibrium, if firms are making profits at the prevailing price, new firms will enter the industry, increasing the total industry output.

Figure 12-11 -Refer to Figure 12-11.Suppose the Prevailing Price Is $20 and Price