DQuestion 11 4 pts Use the diagrams below to answer the ques

DQuestion 11 4 pts Use the diagrams below to answer the question. Assume a company is operating in the perfectly competitive industry and produces output q. The following adjustments are expected in the long run: MC AVC 0 O firms to leave the industry, market supply to rise, and product price to fall. O no change in the number of firms in this industry. firms to enter the industry, market supply to rise, and product price to fall. O firms to leave the industry, market supply to fall, and product price to rise. O

Solution

Answer.)

Q11.) Firms to leave the industry, market supply to fall , and product price to rise.

Q12.) Increase, Output to increase, price to decrease, and profit to decrease.

Q13.) Firms attempt to maximize profits in the long run but not in the short run.

Q14.) In the short run, firms may incur economic losses or earn economic profits but in the long run they earn normal profits.

Q15.) Both allocative efficiency and productive efficiency are achieved.