If the fringe supply curve shifts leftward in the dominant firm model, then the resulting market equilibrium price is ________ and the dominant firm's quantity ________.
A) lower; decreases
B) lower; increases
C) higher; decreases
D) higher; increases

Question

Quizplus · Accepted Answer

When the fringe supply curve shifts leftward, it indicates a decrease in the supply from fringe firms, leading to a higher market equilibrium price. As a result, the dominant firm can increase its quantity supplied to meet the market demand at the higher price.

If the Fringe Supply Curve Shifts Leftward in the Dominant