If firms in competitive price-searcher markets are earning economic losses, what effect will the exit of existing firms have?
A) Demand for the product of each firm will be reduced until the losses are eliminated.
B) Demand for the product of each firm will increase until all firms earn zero profit.
C) Demand for the product of each firm will increase until price is greater than average total cost.
D) Demand for the product of each firm will fall until price equals marginal cost.
Correct Answer:
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