If the demand for a product in an increasing cost perfectly competitive industry decreases, we would expect that price in the long run would ________ and the number of firms in the market would ________.

Question

Quizplus · Accepted Answer

In an increasing cost industry, a decrease in demand leads to a lower equilibrium price and a reduction in the number of firms, as less efficient firms exit the market due to decreased profitability.

If the Demand for a Product in an Increasing Cost