ECON-1010-A-Introduction to Microeconomics Course Materials & Test Answers | moodle.uleth.ca

The horizontal axis represents Quantity in units per day. The vertical axis represents Price and cost in dollars per unit. A horizontal line at y equals P1 is labeled MR. An upward-sloping curved line that becomes steeper is labeled MC.A u-shaped curve is labeled ATC.The MC curve intersects the ATC curve at the ATC curve's minimum. The two curves intersect below the MR line.The MC curve intersects the MR curve to the right of the intersection of the MC and ATC curves.

Figure 11.4.1

Refer to Figure 11.4.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. How will this market change in the long run?

In the long run,

firms that remain in the market will decrease production as new firms enter.

market supply will decrease as firms decrease production.

as new firms enter, old firms will exit the market.

market demand will increase as new firms enter.

firms that remain in the market will expand production.

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ECON-1010-A-Introduction to Microeconomics

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