When the number of competitors in a market falls:
A) the demand curve shifts to the left.
B) the elasticity of demand is likely to increase.
C) the price level is likely to increase.
D) the quantity of output supplied to the market increases.

Question

Quizplus · Accepted Answer

When the number of competitors in a market falls, it typically leads to less competition, which can allow remaining firms to raise prices. This is because there are fewer alternatives for consumers, giving the remaining firms more pricing power.

When the Number of Competitors in a Market Falls