In a perfectly competitive market where firms are currently experiencing economic profits in the short-run,which of the following is least likely to occur during the long-run?
A)A rightward shift in the market supply curve.
B)An increase in the market quantity demanded.
C)An increase in marginal revenue.
D)A decline in the ATC and MC curves.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, marginal revenue (MR) remains constant and equal to the price, because firms are price takers. Therefore, an increase in marginal revenue is least likely to occur in the long run as firms enter the market and economic profits are eroded.

In a Perfectly Competitive Market Where Firms Are Currently Experiencing