If the market starts in equilibrium at point C in panel (b), a decrease in deman

Question

If the market starts in equilibrium at point C in panel (b), a decrease in demand will ultimately lead to:

a. more firms in the industry but lower levels of output for each firm. b. fewer firms in the market. c. a new long-run equilibrium at point D in panel (b). d. lower prices once the new long-run equilibrium is reached. If the market starts in equilibrium at point C in panel (b), a decrease in demand will ultimately lead to: more firms in the industry but lower levels of output for each firm. fewer firms in the market. a new long-run equilibrium at point D in panel (b). lower prices once the new long-run equilibrium is reached.

Explanation / Answer

b. fewer firms in the market.

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