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A perfectly competitive firm’s total cost is TC = 25 + 0.5Q2. The firm can sell...

A perfectly competitive firm’s total cost is TC = 25 + 0.5Q2. The firm can sell as much as it wants at a market determined price of $50. What will happen if there are no barriers to entry?

a. Firms will enter the industry.

b. Firms will exit the industry.

c. Firms will neither enter nor exit the industry.

d. The firm will shut down.

e. None of the above.

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Answer #1

OPTION A IS CORRECT

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