A local coffee shop chain is experiencing economic losses due to a recent increase in coffee bean prices. As a result, several shops decide to exit the market. What is the likely outcome for the remaining coffee shops in the long run?

When some coffee shops leave the market because of rising coffee bean prices, the remaining shops will face less competition. This can allow them to raise their prices since there are fewer options for customers. As the remaining shops increase their prices, they may find that their profits improve, especially if customers are still willing to pay for their coffee. In the long run, if prices remain high enough, new coffee shops might open to take advantage of the potential for profit, which can eventually lead to a new balance in the market. For example, if two shops close and the other three raise their prices, the three remaining shops may attract enough customers to thrive, but eventually, new shops could open if they see an opportunity to make money.