If a perfectly competitive market experiences a decrease in demand leading to some firms exiting the industry, what is the most likely effect on the market price in the long run?

In a perfectly competitive market, when there is a decrease in demand, it means that consumers are buying less of the product. As a result, firms may not be able to sell their goods at the previous price, leading to losses. To cope with these losses, some firms will exit the market, which reduces the overall supply of the product. In the long run, as supply decreases and demand remains low, the market price will stabilize at a new, lower equilibrium level. For example, if a market for apples sees fewer consumers, some apple farmers might stop growing apples, eventually causing the price of apples to settle at a new lower point that reflects the reduced supply.