Suppose firms in a perfectly competitive market are incurring an economic loss. As firms exit, the price _______ and the economic loss of the surviving firms _______.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, when firms exit due to economic losses, the supply decreases, leading to an increase in price. As the price increases, the economic loss of the surviving firms decreases because they can sell their goods at a higher price.

Suppose Firms in a Perfectly Competitive Market Are Incurring an Economic