An increase in the number of firms causes the price firms are able to charge to fall, which results in a movement along the market supply curve.

Name: An increase in the number of firms causes the price firms are able to charge to fall, which results in a movement along the market supply curve.
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Question

Quizplus · Accepted Answer

An increase in the number of firms shifts the market supply curve to the right, rather than causing a movement along the existing supply curve.

An Increase in the Number of Firms Causes the Price