If there is a decrease in demand for a product in a purely competitive industry, it results in an industry contraction that will end when the product price is
A)greater than its marginal cost.
B)equal to its marginal cost.
C)less than its marginal cost.
D)greater than its average cost.

Question

Quizplus · Accepted Answer

In a purely competitive industry, the market reaches equilibrium when the product price equals the marginal cost, ensuring no economic profit or loss, thus stabilizing the industry.

If There Is a Decrease in Demand for a Product