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Subject - Economics:

Microeconomics

MCQ - 42-4052

Question:

If the market price is above the perfectly competitive firm’s average total cost curve, we expect that in the long run,

  1. the industry contracts as firms exit the market.
  2. the industry expands as firms exit the market.
  3. the industry contracts as firms enter the market.
  4. the industry expands as firms exit the market.
  5. the government seeks to regulate the market to ensure efficient outcomes.

Correct Answer: D

Explanation:

If P > ATC, positive short-run economic profits exist. Long-run entry expands the market.

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269 MCQ for effective preparation of the test of Microeconomics of Economics section.

Read the MCQ statement: If the market price is above the perfectly competitive firm’s average total cost curve, we expect that in the long run, , keenly and apply the method you have learn through the video lessons for Microeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 42-4052.

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