what-is-the-effect-of-long-run-price-stabilization-at-the-minimum-average-total-

Question

What is the effect of long-run price stabilization at the minimum average total cost on firm entry and exit in a perfectly competitive market?

Accepted Answer

It discourages firm entry and exit due to zero economic profit.

Answer

It encourages firm entry due to high profitability.

Answer

It has no effect on firm entry and exit.

Answer

It encourages firm exit due to negative profitability.