If some firms are incurring economic losses, then in the long run, the:
A)number of firms in the industry will increase.
B)industry supply curve will shift to the right.
C)number of firms in the industry will not change.
D)number of firms in the industry will decrease.

Question

Quizplus · Accepted Answer

If firms are incurring economic losses, they will eventually exit the industry in the long run, leading to a decrease in the number of firms in the industry. This will reduce the industry supply and could potentially lead to an increase in equilibrium price.

If Some Firms Are Incurring Economic Losses, Then in the Long