What effect will the entry of new firms into an industry very likely have?

Question

Quizplus · Accepted Answer

The entry of new firms will increase the supply of goods or services in the market, which will shift the industry supply curve to the right. This will lead to a decrease in the equilibrium market price, as the increased competition will force firms to lower their prices to attract customers. Existing firms may also experience a decrease in profits, as they will have to lower their prices or increase their costs to remain competitive. However, it is not necessarily true that existing firms will operate at a loss or that profits will increase for existing firms.

What Effect Will the Entry of New Firms into an Industry