Which Sequence Describes the Long-Run Adjustment Process in a Competitive

question 290

Multiple Choice

Which sequence describes the long-run adjustment process in a competitive market when firms experience short-run economic losses?

• A) some firms exit, industry supply decreases, market price falls
• B) market price rises, some firms exit, industry demand decreases, market price falls
• C) market price falls, some firms exit, industry supply falls
• D) some firms exit, industry supply decreases, market price rises

---

Definitions:

Fully Insure

To obtain insurance coverage that provides complete protection against all potential risks or losses.

Insurance

A financial product sold by insurance companies to safeguard against risk and unforeseen losses.

Economic Forecasts

Predictions about future economic activity, including trends in GDP, inflation, employment, and sales.

Expected Value

The weighted average of all possible outcomes in a probability distribution, where each outcome is weighted by its probability of occurrence.