Figure 8.12 -Refer to Figure 8.12.Consider a Typical Firm in a Perfectly

question 59

Multiple Choice

Figure 8.12
-Refer to Figure 8.12.Consider a typical firm in a perfectly competitive industry which is incurring short-run losses.Which of the diagrams in the figure shows the effect on the industry as it transitions to a long-run equilibrium?

• A)Panel A
• B)Panel B
• C)Panel C
• D)Panel D

---

Definitions:

Variable Costs

Expenses that vary directly with the amount of production output of a company.

Purely Competitive Industry

Characterized by many firms selling identical products, where no single firm can influence the market price, ensuring competition based on price.

Short-Run Costs

Costs that vary with the level of output in the short term, where some inputs are fixed.

Fertilizer

A substance, either chemical or organic, introduced to soil or land to improve its fertility and boost the growth of plants.