Question

Roger owns a small health store that sells vitamins in a perfectly competitive market. If vitamins sell for $12 per bottle and the average total cost per bottle is $12.50 at the profit-maximizing output level, then in the long runA. some firms will exit from the market.B. more firms will enter the market.C. average total costs will fall.D. the equilibrium price per bottle will fall.

Answer 1

some firms will exit from the market

Step-by-step explanation:

Roger owns a small health store that sells vitamins in a perfectly competitive market. If vitamins sell for $12 per bottle and the average total cost per bottle is $12.50 at the profit-maximizing output level, then in the long run some firms will exit from the market

A perfectly competitive market consist of many buyers and sellers, different products and perfect information about the price of a good.

Option A. is correct.