The Following Figure Shows Equilibrium at the Industry and Firm

question 55

Multiple Choice

The following figure shows equilibrium at the industry and firm level.Figure 10.6
In the figure,
S₁, S₂, S₃ are the market supply curves.D₁ and D₂ are the market demand curves.MC is the marginal cost curve of the firm.MR₁ and MR₂ are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm.
-When firms leave a perfectly competitive market, then, other things remaining unchanged:

• A)the market supply will decrease but the market price will rise.
• B)both the market supply and the market price will fall.
• C)both the market demand and the price will increase.
• D)the market demand will decrease but the market price will rise.
• E)both the market demand and the market supply will decrease.