If there is a permanent decrease in demand in a perfectly competitive market, then there is an initial _______ in price and existing firms _______.

Question

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In a perfectly competitive market, a permanent decrease in demand leads to a fall in price because the supply remains unchanged initially. As a result, existing firms incur an economic loss because their revenues decrease while their costs remain relatively fixed in the short run.

If There Is a Permanent Decrease in Demand in a Perfectly