Entry into a market by new firms will increase the

Question

Quizplus · Accepted Answer

Entry of new firms will increase the competition in the market, causing an increase in the supply of the good. This increased supply will put downward pressure on the price, disadvantaging existing firms who may need to reduce their prices to remain competitive. However, this increased competition may also lead to innovation and efficiencies, which could ultimately benefit all firms in the market.

Entry into a Market by New Firms Will Increase the