P₁ P₂ P₂ C Q₂ D MC Q₂ Q₂ Output Quantity Refer to the above figures for the typical firm in a competitive market. If the market demand curve is D₁, what happens in the long run? A B Firm entry occurs. Firm exit occurs. ATC Most firms do nothing. X D₂ Most firms incur an economic loss. Quantity

P₁ P₂ P₂ C Q₂ D MC Q₂ Q₂ Output Quantity Refer to the above figures for the typical firm in a competitive market. If the market demand curve is D₁, what happens in the long run? A B Firm entry occurs. Firm exit occurs. ATC Most firms do nothing. X D₂ Most firms incur an economic loss. Quantity

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 10P

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