In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market.Use both diagrams to answer the following question: In the long run, at prices below p2 in Figure 23.3,
A) There is economic profit.
B) The firm will produce the quantity where MC = MR.
C) Firms will enter the market.
D) Firms will exit the market.

Question

In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market.Use both diagrams to answer the following question: In the long run, at prices below p2 in Figure 23.3,
A) There is economic profit. 
B) The firm will produce the quantity where MC = MR. 
C) Firms will enter the market. 
D) Firms will exit the market.

Quizplus · Accepted Answer

The Answer of  In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market.Use both diagrams to answer the following question: In the long run, at prices below p2 in Figure 23.3,
A) There is economic profit. 
B) The firm will produce the quantity where MC = MR. 
C) Firms will enter the market. 
D) Firms will exit the market.