When the Number of Firms in a Market Decreases

question 72

Multiple Choice

When the number of firms in a market decreases,

• A) the demand curve shifts to the left.
• B) the demand curve shifts to the right.
• C) the supply curve shifts to the right.
• D) the supply curve shifts to the left.
• E) both the supply and the demand curves shift to the left.

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Definitions:

Creative Destruction

A concept in economics where innovation leads to the demise of older technologies or industries, driving economic growth.

Medium of Exchange

An item that is widely accepted in transactions for goods and services because it simplifies trade and eliminates the need for a coincidental wants barter system.

Capital Good

Long-term assets used in the production of goods and services, such as machinery, buildings, and equipment.

Store of Value

Store of value is a function of money that allows it to retain purchasing power over time, enabling people to save it and use it in the future.