If firms in a perfectly competitive industry are experiencing economic losses, _____ will occur in the long run, which will cause industry supply to _____ and market price to _____.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, if firms are experiencing economic losses, some firms will exit the industry. This reduces the industry supply, leading to an increase in market prices as the supply curve shifts to the left. This process continues until firms in the industry are earning normal profits.

If Firms in a Perfectly Competitive Industry Are Experiencing Economic