Exhibit 8.11

-Refer to Exhibit 8.11,which shows a perfectly competitive firm in an increasing-cost industry.Suppose long-run equilibrium settles at d_c.At point of c,in the long-run,the firm _____

Question

Exhibit 8.11 -Refer to Exhibit 8.11,which shows a perfectly competitive firm in an increasing-cost industry.Suppose long-run equilibrium settles at d_c.At point of c,in the long-run,the firm _____

Quizplus · Accepted Answer

At point c, the firm is producing at the minimum point on its long-run average cost curve, meaning it is producing at the lowest possible cost given the current technology and resource prices. This means that the firm is earning a normal profit, which is the minimum amount of profit necessary to keep the firm in the industry in the long-run. Therefore, the correct answer is D) earns a normal profit.

Exhibit 8.11 -Refer to Exhibit 8.11,which Shows a Perfectly Competitive Firm in Perfectly