If a perfectly competitive market is in a short-run equilibrium and each firm has P ATC, then

Question

If a perfectly competitive market is in a short-run equilibrium and each firm has P > ATC, then

Accepted Answer

new firms will enter the market because existing firms are earning economic profits.

Answer

price will fall in the short run as it is too high and firms are making economic profits.

Answer

individual firms in the industry will increase their output.

Answer

the market supply curve will become less elastic.

Answer

existing firms will continue to earn economic profits in the long run.

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