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As a result of firms leaving the perfectly competitive frozen yogurt market in the early 2000s, the market

Group of answer choices
a) demand curve shifted leftward.
b) demand curve shifted rightward.
c) supply curve shifted rightward.
d) supply curve shifted leftward.
e) supply curve did not change.

User Nrzonline
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1 Answer

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Final answer:

As firms leave a perfectly competitive market, the supply curve shifts leftward reflecting a decrease in supply; the correct answer is d) supply curve shifted leftward.

Step-by-step explanation:

The question involves understanding the shifts in supply and demand curves in a market structure, specifically a perfectly competitive frozen yogurt market. When firms leave a perfectly competitive market, the supply of the good decreases because there are fewer producers.

This scenario leads to a leftward shift in the supply curve because at any given price, there is less frozen yogurt available for sale. It is important to note that the question does not involve changes in demand but rather changes in supply due to firms exiting the market. Therefore, the correct option is that the supply curve shifted leftward, reflecting a decrease in supply.

User Lutchman
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