The market for home-delivered pizza is extremely competitive in Introville, Utah, and prices continue to fall....
The market for home-delivered pizza is extremely competitive in Introville, Utah, and prices continue to fall. Assume they have fallen so low that the 20 pizza delivery firms are all suffering economic losses. What will likely happen in the long run?
Homework Answers
Answer - Since the firms continue to suffer the economic losses , this means that the firms price is below the total cost. This will be the condition of the economic loss.
If this continues , in the long run , the firms will start shutting down and exit the market. This will happen if in the long run , the price will go below the AVC. This will bring the condition of shut down.
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The market for home-delivered pizza is extremely competitive in
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