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Business, 16.07.2021 18:10 puchie1225
Because industry X is characterized by perfect​ competition, every firm in the industry is earning zero economic profit. If the product price​ falls, no firm can survive. Do you agree or​ disagree? Discuss. This statement is A. correct because firms would be earning negative economic profit. B. incorrect because firms will increase supply in the long ​run, producing more output to offset the decrease in price. C. incorrect because firms will exit the industry in the long​ run, reducing supply until the price rises to the lowest point on the​ long-run average cost curve. D. incorrect because firms will produce in the short run as long as price is above the average fixed cost of production. E. incorrect because new firms will enter the industry in the long​ run, increasing demand until the price rises to the lowest point on the​ long-run average cost curve.
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