Assume a perfectly competitive firm is in long-run equilibrium and there is a decrease in market demand for the firm's output.Which of the following will occur?

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In a perfectly competitive market, a decrease in market demand will lead to a decrease in market price. As a result, firms will face a lower price for their product. In the short run, firms will not be able to adjust their production processes to reduce costs, so they will be forced to reduce their output to a level where marginal cost equals the new market price. This means that existing firms will reduce output in the short run. In the long run, due to the lower market price, some firms may exit the market, which will shift the market supply curve to the left, and the market price will eventually settle at a level where all firms are perfectly competitive again.

Assume a Perfectly Competitive Firm Is in Long-Run Equilibrium and There