To eliminate losses in a perfectly competitive market, firms exit the industry. This exit results in
A) an increase in market supply.
B) a decrease in market supply.
C) an increase in market demand.
D) a decrease in market demand.
E) a decrease in both the market supply and the market demand.
B
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If the risk associated with a particular outcome is ________, or the value of a particular outcome is ________, then cost-benefit analysis might lead people to take too few precautions
A) overestimated, overestimated B) overestimated; underestimated C) underestimated; overestimated D) underestimated; underestimated
According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?
a. the U.S. real exchange rate, but not the U.S. nominal exchange rate b. the U.S. nominal exchange rate, but not the U.S. real exchange rate c. the U.S. nominal exchange rate and the U.S. real exchange rate d. neither the real exchange rate nor the nominal exchange rate