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Markets for Plastic Toothpicks: Concerns

During the early 1990's the firms in the market for plastic toothpicks were making economic losses due to concerns about plastic toothpicks raised by dentists. Assuming the market for plastic toothpicks most closely resembles that of perfect competition, what impact would this have on the number of firms selling plastic toothpicks, market output, and market price in the long-run? Carefully Explain.

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In the long run, some of the firms selling plastic toothpicks will start leaving the market ...

Solution Summary

This solution deals with the economic repercussions on the plastic toothpick industry due to concerns expressed by dentists about their usage.