-Figure 11-10 illustrates the long-run market demand curve and a typical firm's costs.How many firms are likely to exist in the long run in this industry?

Question

Quizplus · Accepted Answer

In the long run, firms enter or exit the market until economic profits are zero. The number of firms is determined by the intersection of the market demand curve and the firm's average total cost curve. If the demand supports two firms at zero economic profit, then two firms will exist in the long run.

-Figure 11-10 Illustrates the Long-Run Market Demand Curve and a Typical