Asked by Jared Stone on Jun 29, 2024
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When some firms leave a purely competitive industry, the market supply curve will shift in such a way that the remaining firms' profits will increase.
Purely Competitive
A market scenario where all participants sell indistinguishable goods, ensuring no one seller can influence prices, creating an ideal competition.
Market Supply Curve
A graphical representation showing the relationship between the price of a good and the total output of the good all producers are willing to supply.
Remaining Firms
Businesses that continue to operate in a market after others have exited, often due to competitive advantages or niches.
- Identify the response of extended period supply curves to shifts in sector expenses and market entry or exit dynamics.
Verified Answer
Learning Objectives
- Identify the response of extended period supply curves to shifts in sector expenses and market entry or exit dynamics.
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