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If Firms in a Competitive Price-Searcher Market Are Currently Earning

Question 75

Multiple Choice

If firms in a competitive price-searcher market are currently earning economic losses, then in the long run,


A) new firms will enter the market, and the current firms will experience a decrease in demand for their products until zero economic profit is again restored.
B) new firms will enter the market, and the current firms will experience an increase in demand for their products until zero economic profit is again restored.
C) some existing firms will exit the market, and the remaining firms will experience an increase in demand for their products until zero economic profit is again restored.
D) some existing firms will exit the market, and the remaining firms will experience a decrease in demand for their products until zero economic profit is again restored.

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