If There Is a Decrease in Industry Supply While the Industry

question 226

Multiple Choice

If there is a decrease in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning losses will see its losses

• A) increase.
• B) not change.
• C) decrease.
• D) impossible to determine

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Definitions:

Trade Surplus

A situation where a country's exports exceed its imports over a given period.

Sovereign Country

An independent state that possesses full self-government and is not controlled by another state.

Porter's Diamond Model

A framework for analyzing the competitive advantage nations or regions possess due to four key factors: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry.

Competitive Potential

Refers to the capacity of a company or industry to compete effectively in the market and expand its market share.