In a perfectly competitive market,when the price is greater than the minimum average total cost for most firms,some will:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms will enter the market if the market price exceeds their minimum average total cost (ATC) so they can make profits. If the market price is greater than the minimum ATC for most firms, it means profits can be made, so more firms will enter the market to take advantage of the opportunity. As a result, the market supply will increase, leading to a decrease in the market price. Firms will continue to enter the market until the price drops to equal their minimum ATC, at which point they will make zero economic profit. Therefore, option B is correct.

In a Perfectly Competitive Market,when the Price Is Greater Than