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pshichka [43]
3 years ago
5

Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-ma

ximizing level of output. How will the market adjust over time? Firms will exit the market, causing price to fall until positive profits are eliminated. Firms will exit the market, causing price to rise until losses are eliminated. Firms will enter the market, causing price to rise until losses are eliminated. Firms will enter the market, causing price to fall until positive profits are eliminated.
Business
1 answer:
pishuonlain [190]3 years ago
8 0

Answer: Firms will exit the market, causing price to rise until losses are eliminated

Explanation:

When there is a decrease in demand in a Perfectly Competitive Market, firms will have to start producing at a lower Quantity to manage their Marginal cost. This leads to Economic losses on their part in the short run.

In the long run however, should the situation remain the same, the new price would be less than their Average Cost which would deepen Economic losses. Firms would respond by exiting the market in the long run.

As the firms exit, the supply curve shifts left as supply drops. This drop in supply leads to a price rise. The exits will continue until enough firms leave that the market's remaining firms will stop suffering economic losses.

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Using the campaign influence related list on the opportunity.

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4 0
2 years ago
Firm ABC sells 1000 units of widgets for $10 per unit per-week. Per-week it pays its employees $1500, rent $2000, materials $100
andrew-mc [135]

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C

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2 years ago
What are the disadvantages of using acrid analysis to help make desisions? HURRY!!!!
stich3 [128]
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4 0
3 years ago
The following information was available for the year ended December 31, 2019: Earnings before interest and taxes (operating inco
Charra [1.4K]

Answer:

Debt ratio = 56%

Times Interest earned = 5 times

Explanation:

<em>The debt ratio is the proportion of the total assets amount that is financed by debt . It is a measure of financial risk. A company with a high debt ratio (in excess of 50%) is considered financially risky. That is may not be able to meet its short term financial obligations</em>

Debt ratio = Debt/Total assets × 100

              = (140,000/250,000)× 100

              = 56%

Times interest earned is the number of times the earning before interest and taxes (EBIT) can pay the interest obligation. It is a measure of financial risk. For example, a company with a ratio of less than 3 times might be considered as potentially unable to meets its loan obligation

Times interest earned = Earnings before interest and tax (EBIT)/Interest expense

= 75,000/15,000

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6 0
3 years ago
Which of the following terms addresses the problem when introducing a new product line could steal sales away from an existing p
lora16 [44]

Answer:

"A"

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It involves research , review and upgrade of production system

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3 years ago
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