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114) If a typical firm in a perfectly competitive industry is incurring losses, thenA) some firms will enter in the long run, causing market supply to increase and market price torise increasing profit for all firms.B) some firms will exit in the long run, causing market supply to decrease and market price tofall increasing losses for the remaining firms.C) all firms will continue to lose money.D) some firms will exit in the long run, causing market supply to decrease and market price torise increasing profits for the remaining firms.Answer: D114)Diff: 2Page Ref: 413/413Topic: Long-Run EquilibriumLearning Outcome: Micro 13: Explain the relationship between production and profits under perfectcompetitionAACSB: Reflective Thinking115) A perfectly competitive market is in long-run equilibrium. At present there are 100 identical firmseach producing 5,000 units of output. The prevailing market price is $20. Assume that each firmfaces increasing marginal cost. Now suppose there is a sudden increase in demand for theindustryʹs product which causes the price of the good to rise to $24. Which of the followingdescribes the effect of this increase in demand on a typical firm in the industry?115)