When new firms have an incentive to enter a competitive market, their entry will
a. increase the price of the product.
b. drive down profits of existing firms in the market.
c. shift the market supply curve to the left.
d. increase demand for the product.
b
You might also like to view...
A cartel is a group of firms that
A) produce differentiated products. B) produce products that are complements. C) agree to restrict output to boost their profit. D) agree to boost output to boost their profit.
Which of the following is FALSE about intraindustry trade?
A) Economies of scale allow firms to enjoy lower average costs. B) It creates gains from trade. C) It is due to comparative advantage. D) It may involve heightened competition and lower prices for consumers. E) It increases consumer choice.
When a firm is experiencing economies of scale, the minimum point of the firm's short-run average total cost curve shifts down as it expands its scale of production
Indicate whether the statement is true or false
Assuming rational expectations and complete wage and price flexibility, systematic stabilization policy impacts
A) real GDP. B) real wages. C) the unemployment rate. D) the inflation rate.