If price is greater than minimum average total cost in a competitive industry, entry occurs.

Name: If price is greater than minimum average total cost in a competitive industry, entry occurs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

if the price is greater than the minimum average total cost, firms are earning a profit, which attracts new entrants to the market. This results in increased competition and eventually drives the price down to the minimum average total cost.

If Price Is Greater Than Minimum Average Total Cost in a Competitive