In a perfectly competitive market, in the long run a permanent ...

[maychende]

In a perfectly competitive market, in the long run a permanent decrease in the market demand results in a smaller number of firms.
 
  Indicate whether the statement is true or false

Question 2

Why do consumers prefer higher indifference curves (farther to the right) to lower indifference curves?
 
  What will be an ideal response?

[nikmaaacs]

Answer to Question 1

TRUE

Answer to Question 2

When comparing two indifference curves, it is always possible to find consumption combinations on the higher indifference curve that have more of both goods than any particular point on the lower indifference curve. Consumers prefer consuming more goods rather than fewer, so they prefer the higher indifference curve because it offers more consumption of everything.