Rose growing is a perfectly competitive industry and all rose growers have the same cost curves. The market price of roses is $7 a bunch and each grower maximizes profit by producing 1500 bunches a week. The average total cost of producing roses is $17 a bunch. Minimum average variable cost is $6 a bunch and the minimum average total cost is $9 a bunch. 1) In the short run, is each grower incurring an economic loss or making an economic profit? How much per week?
Answer with a positive number .
Because firms in the industry are ______, some firms will ______ the market in the long run. The number of Rose growers will ______.
A. making zero economic profit; shut down and exit; decrease
B. making an economic profit; enter; Increase
C. making an economic profit; exit and some firms will enter; decrease or increase depending on the relative number of exiting and entering firms
D. incurring an economic loss exit decrease
E. incurring an economic loss enter and some firms will exit; increase or decrease depending on the relative number of entering and exiting firms.