-Refer to the above figure for the individual firm in a perfectly competitive market. If the firm's average costs are given by AC1, then

Question

Quizplus · Accepted Answer

The industry supply and demand curves are determined by the collective actions of all firms and consumers in the market, not by the cost structure of a single firm. AC1 represents a level of average costs for one firm and does not directly cause shifts in the industry's supply or demand curves.

-Refer to the Above Figure for the Individual Firm in a Perfectly