If Price Is Above the Average Variable Cost but Below

Multiple Choice

If price is above the average variable cost but below the average total cost of a representative firm in a competitive industry:

A) there will be entry to the industry over time.
B) there will be exit from the industry over time.
C) the firms in the industry are just earning a normal rate of return.
D) the firms in the industry are earning a supranormal rate of return.
E) the industry is in long-run equilibrium.