In the long run, if price is greater than average total cost in an industry, then
A)some firms leave the industry.
B)some firms are attracted to the industry.
C)all firms leave the industry.
D)there is no incentive for any firm to enter or leave the industry.
E)the industry disappears.

Question

Quizplus · Accepted Answer

When price is greater than average total cost, firms in the industry are making a profit. This profit attracts new firms to enter the industry, seeking to earn similar returns.

In the Long Run, If Price Is Greater Than Average