If price is above the long-run competitive equilibrium level,
A)Firms will enter the market.
B)Firms will shut down.
C)Firms will incur losses.
D)The market supply will shift to the left.

Question

Quizplus · Accepted Answer

If the price is above the long-run competitive equilibrium level, firms will see the opportunity to earn profits and will enter the market. This increased competition will eventually drive down the price to the long-run competitive equilibrium level.

If Price Is Above the Long-Run Competitive Equilibrium Level