-Refer to Figure 7-11.Suppose the prevailing price is P₁ and the firm is currently producing its loss-minimising quantity.In the long-run equilibrium A) there will be fewer firms in the industry and total industry output decreases. B) there will be more firms in the industry and total industry output increases. C) there will be fewer firms in the industry but total industry output increases. D) there will be more firms in the industry and total industry output remains constant.

Question

Quizplus · Accepted Answer

In the long-run equilibrium, firms that are making losses will exit the industry, leading to fewer firms and a decrease in total industry output.