Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. How will the market adjust over time?

A) Firms will enter the market, causing price to rise until losses are eliminated.
B) Firms will enter the market, causing price to fall until positive profits are eliminated.
C) Firms will exit the market, causing price to rise until losses are eliminated.
D) Firms will exit the market, causing price to fall until positive profits are eliminated.

C

Economics

You might also like to view...

If the money price of a resource such as oil falls, then the

A) LAS curve shifts rightward. B) LAS curve shifts leftward. C) SAS curve shifts leftward. D) SAS curve shifts rightward.

Economics

A trigger strategy can be used in

A) a single-play game or a repeated game. B) a single-play game but not a repeated game. C) a repeated game but not a single-play game. D) neither a single-play game nor a repeated game.

Economics