Exhibit 8-18 A typical firm in a perfectly competitive market
In Exhibit 8-18, assume the perfectly competitive firm is in long-run equilibrium and there is an increase in demand. As a result, the firm in the short run will increase output along its:
A. short-run average total cost curve B.
B. short-run marginal cost curve B.
C. long-run average cost curve.
D. none of these because the firm shuts down.
Answer: B
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