Question

If price is initially less than minimum average total cost, resulting losses will cause firms to leave the industry eventually resulting in _____.

Answer 1

industry contraction that decreases supply until price rises again to equal minimum average total cost (ATC)

Step-by-step explanation:

An industry contracts when firms incur losses and leave the industry. The loss of firms or suppliers causes supply to decrease resulting in increases in price until once again the price is equal to the minimum ATC.