Fill in the blank options: At the current short-run market price, firms will A)

Question

Fill in the blank options:

At the current short-run market price, firms will A) produce B) shut down in the short run. In the long run, A) some firms will enter B) some firms will exit C) firms will neither enter nor exit the market given the current market price.

Consider a perfectly competitive market for wheat in Chicago. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: The next graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. A line segment will automatically connect the point Then, place the black point (X symbol) on the graph to indicate the short-run equilibrium price and quantity in this market, Dashed drop lines will automatically extend to both axes.

Explanation / Answer

At the current short-run market price, firms will A) produce in the short run. In the long run, B) some firms will exit the market given the current market price.

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