Question

Use the figure above to answer the following questions. It pictures three cost curves of a perfectly competitive producer of apples. It also pictures a variety of possible market prices, ranging from $1.10 per bushel to $4.90 per bushel. We assume that the firm wants to maximize profit. Let Point f= $4.90/bushel; point g= $4/bushel: point m= $2.40/bushel Figure 21.1 Price or Cost (dollars/bushel) MC AT 4.90 g 13 18 24 37 46 50 54 Quantity (thousands of bushels/year) 8) In the long run, if price is $3.10, firms will: a. Continue to operate at a profit b. Continue to operate at a loss c. Shutdown d. Exit the industry e. Enter the industry