Consider a perfectly competitive firm whose minimum average total cost is $100.This firm is representative of all the firms in the market.If the market price is $80,then in the long run

Question

Quizplus · Accepted Answer

In the long run, if the market price is below the minimum average total cost, firms will incur losses and some will exit the market, causing the market supply to fall.

Consider a Perfectly Competitive Firm Whose Minimum Average Total Cost