The following table gives the average cost of production for three different categories of firms producing the same product.
-Refer to Table .Suppose the price of the commodity increases to $8 per unit.Which of the following situations will be observed in the market?
A) Type C firms will enter the market and drive up the price level to $10 per unit.
B) Type B firms will enter the market and drive down the price level to $6 per unit.
C) Type A firms will continue to supply the entire output earning supernormal profit.
D) Type A firms will leave the market while Type B firms will take their place.
Correct Answer:
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