If firms in a competitive market are incurring economic losses,the long-run market supply curve

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When firms in a competitive market are incurring economic losses, some firms may exit the market in the long run. This decreases the number of firms in the market, reducing the market supply and driving up the market price. As a result, the long-run market supply curve shifts upward until it intersects the demand curve at a point where firms can earn a zero economic profit. This intersection point is above the point where the short-run market supply curve and the demand curve intersect.

If Firms in a Competitive Market Are Incurring Economic Losses,the