Refer to the figure at right. When market price equals $40, we can expect A. exit of firms and a decrease in market price. B. entry of firms and a decrease in market price. C. exit of firms and an increase in market price. D. entry of firms and an increase in market price.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 12P
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Dollars per
unit of
LMC
output
LAC
SMC
SAC
$40
P- MR
S30
12
Output
Transcribed Image Text:Dollars per unit of LMC output LAC SMC SAC $40 P- MR S30 12 Output
Refer to the figure at right. When market price equals $40, we can expect
A. exit of firms and a decrease in market price.
B. entry of firms and a decrease in market price.
C. exit of firms and an increase in market price.
D. entry of firms and an increase in market price.
Transcribed Image Text:Refer to the figure at right. When market price equals $40, we can expect A. exit of firms and a decrease in market price. B. entry of firms and a decrease in market price. C. exit of firms and an increase in market price. D. entry of firms and an increase in market price.
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