The Following Graph Shows the Demand Curve for a Good

question 15

Multiple Choice

The following graph shows the demand curve for a good and the long run average cost curve for a typical firm in this market.
If the government does not intervene in the market, then

• A) there will be many firms in this market, all of whom will take the market price as given and produce where price equals marginal cost
• B) there will only be 1 firm in this market, and they will produce where marginal revenue equals marginal cost
• C) there will only be 1 firm in this market, and they will take the price as given and produce where price equals marginal cost
• D) no firms will enter this market