The cycle of______ market demand that leads to______ , and then an increase in the market supply curve has caused many firms bankruptcy.

Question

Quizplus · Accepted Answer

The cycle of increased market demand often leads to overexpansion, which refers to firms producing more output than the market demands. As a result, the firm incurs losses and sometimes even goes bankrupt. This happens because the market is oversupplied, and the prices decline due to excessive competition. Therefore, as the market demand increases, firms must be cautious and not over-expand their production capacities.

The Cycle Of______ Market Demand That Leads To______ , and Then

The Cycle Of Market Demand That Leads To , and Then