Refer to Figure 12

Question 88
Multiple Choice

Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.Firms are A)making an economic profit, and some firms leave the market. Market supply decreases. B)making an economic profit, and some firms enter the market. Market supply increases. C)incurring an economic loss, and some firms leave the market. Market supply decreases. D)incurring an economic loss, and some firms enter the market. Market supply increases. E)incurring an economic loss, but since they are covering average variable cost, no one will exit the market in the long run.