If there is an increase in industry supply while the industry demand remains the same, then an individual firm in a perfectly competitive industry currently earning negative profits will see its profits
A) increase.
B) not change.
C) decrease further.
D) impossible to determine

Question

Quizplus · Accepted Answer

When there is an increase in industry supply while demand remains constant, prices tend to fall. For a firm already experiencing negative profits, lower prices will likely exacerbate its losses, leading to further decreased profits.

If There Is an Increase in Industry Supply While the Industry