Detail

As we already know, if the price is $32 firms will produce 5 units. Total revenue will be 5 x 32 = $160 and total cost is $125, therefore, firms are earning profits of $35. This means that, in the long run, firms will enter causing prices to fall.

GROSS GENERALIZATIONS
Output	Total Cost	Marginal Cost
0	25.00	-
1	35.00	10
2	50.00	15
3	70.00	20
4	95.00	25
5	125.00	30
6	160.00	35
7	200.00	40

22. Once more referring to the data given in the table above, if production costs at Gross Generalizations are exactly the same as at every other firm in the industry and the price is $32 you expect in the long run:

Firms will enter the industry and price will fall.
Firms will leave the industry and price will rise. Firms will not leave the industry when there are profits.
Firms will leave the industry and price will fall. Again, firms will not leave the industry when there are profits.
Firms will neither enter or leave the industry. Firms will enter the industry when there are profits.
Firms will enter the industry and price will rise. Firms will enter the industry but prices will fall (not rise) until they reach profit maximizing zero economic profits.