Question

Two years​ ago, a large number of firms entered a market in which existing firms had been earning positive economic profits. By the end of last​ year, the typical firm in this industry had begun earning negative economic profits. No other events occurred in this market during the past two years.
Part 2
a. During the last​ year,
Part 3
A.
the firms produced less output due to increased competition and consequently incurred losses.
B.
the firms could not increase output since some key inputs were in short supply.
C.
the firms incurred​ losses, as the market output expanded and the market price fell.
D.
the firms became less efficient and started to produce at a level higher than minimum efficient scale.

Answer 1

b. All of the following adjustments will take place in this market beginning this year except
Part 5
A.
that price and cost will fall.
B.
that market output will fall and price will increase.
C.
that some firms will leave the market.
D.
that existing firms will move toward their minimum efficient scale and zero economic profit.

Answer 2

wrong answer

Answer 3

C. the firms incurred​ losses, as the market output expanded and the market price fell.

Answer 4

B. that market output will fall and price will increase.

Answer 5

I apologize for the incorrect response.

The correct answer is D. that existing firms will move toward their minimum efficient scale and zero economic profit.