Question

In a perfectly competitive market where each supplier incurs a loss, what is the likely outcome as the market adjusts to a new long-run equilibrium

		More suppliers and a higher selling price
		More suppliers and a lower selling price
		Fewer suppliers and a higher selling price
		Fewer suppliers and a lower selling price

Answer 1

Answer) In a perfectly competitive market where each supplier incurs a loss, what is the likely outcome as the market adjusts to a new long-run equilibrium fewer suppliers and a higher selling price because firms are incurring losses so existing firms which are incurring losses will start leaving the market and this would shift the supply curve to the left and as it's shift market price starts rising and this would, in turn, make selling price higher.

Hence option C is the correct answer.

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