Refer to the information provided in Figure 9.2 below to answer the question(s) that follow. Figure 9.2 -Refer to Figure 9.2. If demand for wheat is D₃, then in the long run A) the firm will shut down. B) the firm will exit the industry. C) new firms will enter the industry, and the current firms will expand production. D) None of the above is correct.

Question

Quizplus · Accepted Answer

In the long run, if demand is D3, the price of wheat will be P3, which is above the average total cost of production. This will attract new firms to enter the industry, and the current firms will expand production.

Refer to the Information Provided in Figure 9