Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved
Even though P2, Q2 is a short run equilibrium firms are incurring losses, shown
as the red shaded area to the right.
Because diner owners are now earning less that could be earned
in their next best opportunities some will exit the industry because
of the losses.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved