New firms will enter the market when profit-maximising firms in competitive markets are earning profits.

Name: New firms will enter the market when profit-maximising firms in competitive markets are earning profits.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

New firms have an incentive to enter the market when existing firms are earning profits as they see an opportunity to also earn profits. In a competitive market where profits are being earned, new firms can enter and increase competition, which can lead to lower prices for consumers.

New Firms Will Enter the Market When Profit-Maximising Firms in Competitive