In a Perfectly Competitive Industry, the Equilibrium Price Is $56

question 116

Multiple Choice

In a perfectly competitive industry, the equilibrium price is $56 and the minimum average total cost of the industry's firms is $40. If this is a constant-cost industry, we can expect that in the long run, firms will _____ the market, shifting the industry's short-run supply curve _____.

• A) enter; outward until the minimum average total cost rises to $56
• B) enter; outward until the new equilibrium price is $40
• C) enter; inward until firms are making positive profit
• D) exit; inward until firms are breaking even

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