Question

If a typical firm in a perfectly competitive industry is incurring​ losses, then A. all firms will continue to lose money. B. some firms will enter in the long run causing market supply to increase and market price to​ rise, increasing profit for all firms. C. some firms will exit in the long run causing market supply to decrease and market price to​ fall, increasing losses for the remaining firms. D. some firms will exit in the long run causing market supply to decrease and market price to​ rise, increasing profits for the remaining firms.

Answer 1

Answer:

Option B is correct.

some firms will enter in the long run causing market supply to increase and market price to​ rise, increasing profit for all firms.

Explanation:

When firms in perfectly competitive Market incurs a loss then some firms will exit the market, leaving less number of firms and thus supply decreases which also increase the prices and increases the profit of the remaining firms

Answer 2

Answer:

D. some firms will exit in the long run causing market supply to decrease and market price to​ rise, increasing profits for the remaining firms.