A Perfectly Competitive Firm in a Constant-Cost Industry Produces 1,000

question 218

Multiple Choice

A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000.The prevailing market price is $48.Assuming that this firm continues to produce in the long run, what happens to output level in the long run?

• A)The firm's output falls.
• B)The firm's output increases.
• C)The firm produces the same output level.
• D)There is insufficient information to answer the question.

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Definitions:

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