The graph shown displays the cost curves for a firm in a perfectly competitive market. Assume that all firms in this market have identical cost structures. If the market price is initially $5, which of the following statements is true? 
In the long run, the market demand curve will decrease.This firm should produce in the short run but exit in the long run.In the long run, the market price will be $7.
Definitions:
Liability
A legal responsibility or obligation, often of a financial nature.
Ratification
The act of giving formal consent to a treaty, contract, or agreement, making it officially valid.
Void
A legal term indicating that a contract or agreement is null, invalid, and has no legal effect.
Disaffirm
The legal act of denying or rejecting a contract or agreement, especially by a party who was not competent to enter it at the time of agreement.
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