help Question 22 (of 30) Save & Exit Submit Time remalning: 0:26:46 2. The minim

Question

help Question 22 (of 30) Save & Exit Submit Time remalning: 0:26:46 2. The minimum possible average total cost of producing generic antidepressant medication in the long run is $10 per bottle Suppose in this perfectly competitive industry firms are receving a price of $20 per bottle for their product in the short run and there are constant returns to scale Other things being equal t follows that O the price of generic antidepressants will be between $10 and $20 in the long run wlt be bewe i and 20 in the long tun the price of generic antidepressants wilt be $10 in the long rur O there is not enough nformation to give a definitive answer O the price of generic ontidepressonts wibe $20 in the long v

Explanation / Answer

The firms are receiving $20 price for their product in the short run and will make profit as the cost is $10,so, in the perfectly competitive industry,because of free entry and profit possibility,new firms will get attracted to the market and the market price will come down and will be equal to the cost so that the firms are neither making profit nor making loss.

Therefore,the price of generic antidepressant drugs will be $10 in the long run.

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