Figure 7.9
-Refer to Figure 7.9.Suppose the prevailing price is $20 and the firm is currently producing 1350 units.In the long-run equilibrium,
A) there will be fewer firms in the industry and total industry output decreases.
B) there will be more firms in the industry and total industry output increases.
C) there will be fewer firms in the industry but total industry output increases.
D) there will be more firms in the industry and total industry output remains constant.

Question

Figure 7.9 
-Refer to Figure 7.9.Suppose the prevailing price is $20 and the firm is currently producing 1350 units.In the long-run equilibrium,
A) there will be fewer firms in the industry and total industry output decreases. 
B) there will be more firms in the industry and total industry output increases. 
C) there will be fewer firms in the industry but total industry output increases. 
D) there will be more firms in the industry and total industry output remains constant.

Quizplus · Accepted Answer

In the long-run equilibrium, if the prevailing price is $20 and firms are making profits, new firms will enter the industry, increasing the total industry output.

Figure 7.9 -Refer to Figure 7.9.Suppose the Prevailing Price Is $20 and Is