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

As firms exit the market, the supply decreases, leading to a rise in price. This reduces the economic loss for the remaining firms as they can sell their products at a higher price.

Suppose Firms in a Perfectly Competitive Market Are Incurring an Economic