If firms are losing money in a purely competitive industry,then in the long run this situation will shift the industry:

Question

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If firms are losing money in a purely competitive industry, some firms will exit the industry in the long run. This will decrease the number of firms in the industry and shift the supply curve to the left. As a result, the market price will increase.  This is known as the process of market adjustment in a purely competitive market.

If Firms Are Losing Money in a Purely Competitive Industry,then