A perfectly competitive market is in equilibrium and then demand decreases.The decrease in demand means the market price will ________ and eventually there will be ________.

Question

Quizplus · Accepted Answer

When demand decreases in a perfectly competitive market, the market price falls because the same quantity of goods is chased by fewer buyers. This leads to lower revenues for firms, making the market less attractive. Consequently, some existing firms may find it unprofitable to continue operating and decide to exit the market.

A Perfectly Competitive Market Is in Equilibrium and Then Demand