2. Suppose that the pen-making industry is perfectly competitive.

Also suppose that each current firm and any potential firms that might enter the industry all have identical cost curves, with minimum ATC = $1.25 per pen. If the market equilibrium price of pens is currently $1.50, what would you expect it to be in the long run? LO11.2

a. $0.25.

b. $1.00.

c. $1.25.

d. $1.50.