If the firms in a competitive price-searcher market are suffering short-run losses, which of the following will occur in the long run?

Question

Quizplus · Accepted Answer

In the long run, firms suffering losses will exit the market, leading to a reduction in supply. This will cause the remaining firms to capture the customers of the exiting firms, potentially increasing their demand and allowing them to return to profitability.

If the Firms in a Competitive Price-Searcher Market Are Suffering