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Long Run Equilibrium
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Long Run Equilibrium
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11. Perfect Competition / Long Run Equilibrium / Problem 1
Problem 1
In the long run, why does the market supply curve stabilize at the minimum average total cost (ATC) despite changes in demand?
A
Because the government regulates prices to ensure stability.
B
Because technological advancements always reduce costs.
C
Because consumer preferences remain constant over time.
D
Because firms enter and exit the market until economic profits are zero.
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