The following table gives the average cost of production for three different categories of firms producing the same product.
-Refer to Table .Suppose the demand for the commodity rises from 3,200 units to 3,500 units and the market price increases to $5.Which of the following situations will be observed?
A) Type A will supply 3,200 units and earn normal profits while Type B will supply the remaining at a loss.
B) Type A and Type B firms will jointly supply 3,500 units and both will break even.
C) Type A firms will supply 3,200 units and Type B will supply the rest.
D) Type A firms will supply 3,500 units and earn supernormal profit.
Correct Answer:
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