If there is a decrease in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning losses will see its losses
A) increase.
B) not change.
C) decrease.
D) impossible to determine

Question

Quizplus · Accepted Answer

When there is a decrease in industry supply while demand remains constant, the market price will increase. For an individual firm in a perfectly competitive industry, this means it can sell its product at a higher price, which can lead to a decrease in losses or potentially even lead to profits.

If There Is a Decrease in Industry Supply While the Industry