The market has a standard downward-sloping market demand curve, and a standard upward-sloping market supply curve.

Then there is exit of about 10 percent of the firms in the industry.The market changes to a new short-run equilibrium.

Statement to evaluate:Comparing the new short-run equilibrium to the initial short-run equilibrium:The exit of firms leads to a smaller change in the market quantity if the

price elasticity of supply is 1.3 than if the price elasticity of supply is 0.7.