When Existing Firms Leave a Perfectly Competitive Industry,________

question 146

Multiple Choice

When existing firms leave a perfectly competitive industry,________.

• A) the equilibrium price decreases, and the equilibrium quantity increases
• B) the equilibrium price increases, and the equilibrium quantity decreases
• C) both the equilibrium price and quantity increase
• D) both the equilibrium price and quantity decrease

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Definitions:

Fishery Collapse

A rapid decline in a fishery’s population because its fish are being harvested faster than they can reproduce.

Harvesting Rates

The speed at which natural resources are extracted or harvested, impacting sustainability and future availability.

Reproduction

The biological process by which new individual organisms are produced.

ITQ

Individual Transferable Quotas (ITQs) are a tool in fishery management that allocate a specific portion of the total allowable catch to individual fishermen or companies.