If the figure in panel (a) reflects the long-run equilibriumof a profit-maximizi

Question

If the figure in panel (a) reflects the long-run equilibriumof a profit-maximizing firm in a competitive market, the figure inpanel (b) most likely reflects a. perfectly inelastic long-run market supply. b. the idea that free entry and exit of firms in the marketlead to only one market price in the long run. c. the product of the infividual supply curves of all firms inthe market. d. the fact that zero profits cannot be sustained in the longrun. If the figure in panel (a) reflects the long-run equilibriumof a profit-maximizing firm in a competitive market, the figure inpanel (b) most likely reflects a. perfectly inelastic long-run market supply. b. the idea that free entry and exit of firms in the marketlead to only one market price in the long run. c. the product of the infividual supply curves of all firms inthe market. d. the fact that zero profits cannot be sustained in the longrun.

Explanation / Answer

a. perfectly inelastic long-run market supply. Price does not change with change in supply, thus notflexible, thus inelastic

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