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23 March, 18:55

Suppose a perfectly competitive firm, which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees. In the short run, which of the following will occur?

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  1. 23 March, 20:45
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    C) ATC and MC will shift down, causing the firm to earn a positive economic profit.

    Explanation:

    In the short run, average total cost and marginal cost of production will decrease causing the firm to earn more profit.
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