When firms have an incentive to exit a competitive market, their exit will
Drive down market prices
Incorrect AnswerDrive down profits of existing firms in the market.
Incorrect AnswerDecrease the quantity of goods supplied in the market.
Correct Answer All of the above are correct.
Incorrect AnswerExplanation:
A perfectly competitive firm is a price taker, which means that it must accept the equilibrium price at which it sells goods.This is because when firms exit the industry, the supply produced would reduce and hence the quantity supplied to the market would fall.
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By: honey kaundal