If a product is going out of style in a aggressive marketplace, the end result could be that D. The earnings of an man or woman corporation remains at 0 in the lengthy run.
The required details for competitive market in given paragraph
A aggressive marketplace is characterized by: No barriers to entry this means that dealers can are available in and go away at will. Prices are the same for all dealers. If a product went out of fashion, groups could begin making losses and much less human beings could be shopping for the product. This could cause a few providers leaving the marketplace until just a few are left. This will cause the rate rising. If income come to be greater than 0, groups will come returned into the marketplace to make that earnings.
The elevated deliver could lessen the rate again. The earnings will then pass to 0. This will maintain going on thereby leaving the earnings at 0 in the lengthy run.
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Complete question
Consider a competitive market for a consumer product. Suppose this product goes out of fashion with consumers. How will this sudden drop in popularity affect the profit of an individual firm in this market in the long run?
A The profit of an individual firm increases from a smaller positive value to a larger positive value in the long run.
B. The profit of an individual firm increases from zero to a positive value in the long run.
C. The profit of an individual firm decreases from zero, and the firm will incur a loss in the long run.
D. The profit of an individual firm stays at zero in the long run.
