Ian McDonald owns a company that sells sleds in a perfectly competitive market. A lighter-than-normal snowfall has caused the market demand curve for sleds to shift to the left. In the short run, which of the following is likely to happen?
A) The market price for sleds will remain unchanged.
B) The market price for sleds will increase.
C) More sled producers will enter the industry.
D) Increased economic profit will be earned by the firms in the sled industry.
E) The market price for sleds will fall.

Question

Quizplus · Accepted Answer

A leftward shift in the demand curve indicates a decrease in demand. In a perfectly competitive market, this leads to a decrease in the market price for sleds as suppliers compete for fewer buyers.

Ian McDonald Owns a Company That Sells Sleds in a Perfectly