-Refer to the above figure for the individual firm in a perfectly competitive market. If the firm's average costs are given by AC3, then

Question

Quizplus · Accepted Answer

The correct answer is A because if the firm's average costs are given by AC3, then the firm will produce less output at any given price. This will lead to a decrease in the industry supply, which will shift the industry supply curve leftward.

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