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As Firms Exit an Industry, the Industry Supply Curve Shifts

Question 17

Multiple Choice

As firms exit an industry, the industry supply curve shifts __________ and the equilibrium price __________ until long-run competitive equilibrium is established and the surviving firms are earning __________ economic profits.


A) leftward; rises; zero
B) leftward; falls; positive
C) leftward; rises; positive
D) rightward; falls; negative
E) rightward; rises; positive

Correct Answer:

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