Six firms are currently producing and selling in a market.When two of the six firms exit the market,economists expect that the equilibrium price will ________ and the equilibrium quantity will ________.

Question

Quizplus · Accepted Answer

When two firms exit a market, the supply decreases. This typically leads to a higher equilibrium price due to the reduced supply. However, the equilibrium quantity is expected to be lower because there are fewer firms producing the goods.

Six Firms Are Currently Producing and Selling in a Market