Hi techs average total cost curve rise back to atc 1

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Hi-Tech's average-total-cost curve rise back to ATC 1 ATC1. The market price stays at P 1 P1. All firms earn zero profit.
Points: 1 / 1 Close Explanation Explanation: When the patent expires and other firms are free to use the technology, all firms' average-total-cost curves decline to ATC 2 ATC2. Therefore, the market price falls to P 2 P2 and firms reach zero profit. See Section: The Long Run: Market Supply with Entry and Exit. TOTAL SCORE: 2/2 13. Firms in Competitive Markets The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply.
Points:
1 / 1
The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. FirmPrice and CostsQuantityMCATCAVCP1P2 MarketPriceQuantityDemandS1S2P1P2 If firms in the market are producing output but are currently making economic losses, P 2 P2 illustrates the present situation for the typical firm in the market, and S 2 S2 indicates the corresponding supply curve. Points: 1 / 1 Close Explanation Explanation: If firms in the market are producing output but are currently making economic losses, the price must be between average total cost and average variable cost, so P 2 P2 must illustrate the present situation for the typical firm in this market. See Sections: The Marginal-Cost Curve and the Firm's Supply Decision; and The Firm's Short-Run Decision to Shut Down. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply.
Average total cost will decrease. Marginal cost will increase. Points: 1 / 1 Close Explanation

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