Firms that fail to compete with lower prices and/or better products will:
A) go bankrupt and increase economic efficiency.
B) go bankrupt and decrease economic efficiency.
C) have to merge with other companies to stay in business.
D) often increase economic efficiency if they stay in business even though they are making losses since this will increase competition in the market.

Question

Quizplus · Accepted Answer

Firms that fail to compete with lower prices and/or better products will go bankrupt and increase economic efficiency because it will remove inefficient firms from the market, allowing more efficient firms to thrive.

Firms That Fail to Compete with Lower Prices And/or Better