A perfectly competitive industry is initially in a short-run equilibrium in which all firms are earning zero economic profits but in which firms are operating below their minimum efficient scale. All of the following statements are true as the industry and the firms make their long-run adjustments except that
Part 2
A.
some firms leave the industry and the existing firms slowly adjust their production to reach their minimum efficient scale.
B.
new firms enter the market, causing the industry output to expand.
C.
individual firms expand their output level to their minimum efficient scale.
D.
firms begin to make adjustments along their long-run average cost curves.