A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost

So we can see that an increase in government spending will raise the level of economic equilibrium, while a decrease in government spending will lower it

What will be an ideal response?

When a firm is experiencing economies of scale

A) the MP curve slopes upward. B) the LRAC curve slopes downward. C) diminishing returns to labor have been suspended. D) the MC curve slopes downward.