Refer to Figure 23.5 for a perfectly competitive firm. Given the current market price of $200, we expect to see
A) Firms exit from the industry, driving up the market price.
B) Firms exit from the industry, driving down the market price.
C) No change in the number of firms in the industry and no change in the market price.
D) Firms enter the industry, driving down the market price.

Question

Refer to Figure 23.5 for a perfectly competitive firm. Given the current market price of $200, we expect to see
A) Firms exit from the industry, driving up the market price. 
B) Firms exit from the industry, driving down the market price. 
C) No change in the number of firms in the industry and no change in the market price. 
D) Firms enter the industry, driving down the market price.

Quizplus · Accepted Answer

The Answer of  Refer to Figure 23.5 for a perfectly competitive firm. Given the current market price of $200, we expect to see
A) Firms exit from the industry, driving up the market price. 
B) Firms exit from the industry, driving down the market price. 
C) No change in the number of firms in the industry and no change in the market price. 
D) Firms enter the industry, driving down the market price.