Answer:
The correct answer is B. in the long-run, a typical firm’s price is greater than their average cost.
Step-by-step explanation:
When companies are making a profit, there are new companies that have an incentive to enter the market. This entry increases the number of products from which customers can choose and, therefore, reduces the demand of each of the companies already in the market. In other words, the benefits encourage entry and entry shifts the demand curve of existing companies to the left. By decreasing the demand for the company's existing products, we are getting less benefits.
In contrast, when companies are experiencing losses, those in the market have an incentive to exit. When leaving companies, customers have fewer products to choose from. This reduction in the number of companies increases the demand of those that remain in the market. In other words, the losses encourage the exit and the exit shifts the demand curves of the remaining companies to the right.
By increasing the demand for the products of the remaining companies, they obtain more benefits (that is, they experience minor losses). This entry and exit process continues until the market companies obtain exactly zero economic benefits.