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The Market for a Competitive Price-Taker Market Clears at a Price

Question 187

Multiple Choice

The market for a competitive price-taker market clears at a price of $3, and the minimum average cost for all firms is $2.50. In the long run, we would expect an increase in


A) each firm's output.
B) the number of firms.
C) each firm's profit.
D) each firm's average cost.

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