An increase in the number of firms in a perfectly competitive market causes:
A) a movement along the market supply curve.
B) an increase in each firm's supply curve.
C) an increase in the market supply curve.
D) a decrease in the market supply curve.

Question

Quizplus · Accepted Answer

An increase in the number of firms in a perfectly competitive market leads to an increase in the market supply curve as more firms contribute to the total quantity supplied at each price level.

An Increase in the Number of Firms in a Perfectly