Respuesta :
In pure competition, if the market price of the product is lower than the minimum average total cost of the firms, some firms will exit the industry and the industry supply will decrease.
What is a perfect competition?
A perfect competition is a market where there are many buyers and sellers of similar goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, if price is lower than minimum average total cost, firms would exit the industry and this would reduce supply.
Here is the complete question:
In pure competition when the market price of the product is initially higher than the minimum average cost of the firms, then:
A. Some firms will exit the industry and the industry supply will decrease.
B. Other firms will enter the industry and the industry supply will increase.
C. Some firms will exit the industry and the industry supply will increase.
D. Other firms will enter the industry and the industry supply will decrease.
To learn more about perfect competition, please check: https://brainly.com/question/17110476
