THREE FIRMS OPERATE UNDER PERFECT COMPETITION, PRODUCING 900 UNIT...

19. Three firms operate under perfect competition, producing 900 units of the same product but using different production technologies. Each company’s cost structure is indicated below: Company X Y Z Total Variable Costs $2,700 $3,600 $4,500 Total Fixed Costs 2,700 1,800 900 Total Costs $5,400 $5,400 $5,400 Which of the following statements is most accurate? If the unit selling price is: A. $6.00, all firms should exit the market in the long run. B. $3.00, firm X should continue to operate in the short run, but firms Y and Z should shut down production. C. $4.50, all firms should continue to operate in the short run, but exit the market in the long run if these conditions are expected to persist.