Question

1. Complete the following sentences. When some firms exit a market in which firms incur economic​ losses, the market supply curve shifts​ ______ and the market price​ ______.

A. ​leftward; rises
B. ​rightward; falls
C. ​rightward; rises
D. ​leftward; falls
2. Each remaining​ firm's economic loss​ _______.
A. remains unchanged
B. increases
C. decreases

Answer 1

Leftward; Rises

Step-by-step explanation:

When a firm exit a market, it negatively affects the total supply of commodities and the supply curve shifts leftwards. Likewise, a shortage is created, and because of the increase in demand and fewer supplies, market price rises. Price and supply have a negative relationship which means, a decrease in supply will increase the prices; it happens when a firm exit a market. Similarly, the economic profits of the remaining firm's increases due to a rise in prices.