$8. All firms will make the min average total cost in the long run. This is productive efficiency. Firms will leave the industry until the price rises from $7 to $8
A business indicator known as long-run average total cost (LRATC) shows the average cost per unit of output over a lengthy period of time when all inputs are assumed to be erratic and the production scale is flexible. The long-run average cost curve displays the long-run total cost of production at the lowest level of output.
Assuming that all production parameters are variable, the long-run average cost (LRAC) curve displays the firm's lowest cost per unit at each level of output. The ideal factor mix, as outlined in the preceding section, is assumed by the LRAC curve to be selected by the firm in order to provide any amount of output.
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