As exit from a perfectly competitive industry that is currently unprofitable pushes up the market price, producers will move from a situation where price ____ average total cost to one where price ____ average total cost.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, if the industry is unprofitable, firms will exit, reducing supply and increasing the market price until it equals the average total cost, eliminating losses.

As Exit from a Perfectly Competitive Industry That Is Currently