Question

Suppose a perfectly competitive firm, which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees. In the short run, which of the following will occur?

Answer 1

C) ATC and MC will shift down, causing the firm to earn a positive economic profit.

Step-by-step explanation:

In the short run, average total cost and marginal cost of production will decrease causing the firm to earn more profit.