In the long run, if price is less than average cost, there is an incentive for firms to exit the market. there is profit incentive for firms to enter the market. the market must be in long-run equilibrium. there is no incentive for the number of firms in the market to change.
In the long run, if price is less than average cost, there is an incentive for firms to exit the market. there is profit incentive for firms to enter the market. the market must be in long-run equilibrium. there is no incentive for the number of firms in the market to change.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
Problem 5CQ
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In the long run, if price is less than average cost, there is an incentive for firms to exit the market. there is profit incentive for firms to enter the market. the market must be in long-run equilibrium. there is no incentive for the number of firms in the market to change.
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