When firms have an incentive to exit a competitive market,their exit will

Question

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When a firm exits a competitive market, the number of firms in the market decreases, which reduces the competitive pressure among the remaining firms. As a result, the remaining firms are likely to experience an increase in their profits, as they can now operate with less competition. Therefore, the exit of a firm from a competitive market raises the profits for the firms that remain in the market.

When Firms Have an Incentive to Exit a Competitive Market,their