Figure 13-13

-Refer to Figure 13-13.If the diagram represents a typical firm in the market, what is likely to happen in the long run?
A)Some firms will exit the market causing the demand to increase for firms remaining in the market.
B)New firms will enter the market causing the demand to decrease for existing firms.
C)Inefficient firms will exit the market and new cost-efficient firms will enter the market.
D)Competition will be intensified as firms strive to make long-run profits.

Question

Figure 13-13
 
-Refer to Figure 13-13.If the diagram represents a typical firm in the market, what is likely to happen in the long run?
A)Some firms will exit the market causing the demand to increase for firms remaining in the market. 
B)New firms will enter the market causing the demand to decrease for existing firms. 
C)Inefficient firms will exit the market and new cost-efficient firms will enter the market. 
D)Competition will be intensified as firms strive to make long-run profits.

Quizplus · Accepted Answer

In the long run, if firms in a market are making profits, new firms are likely to enter the market, increasing supply and causing the demand curve for existing firms to decrease.

Figure 13-13 -Refer to Figure 13-13.If the Diagram Represents a Typical Firm