If new firms enter the computer manufacturing industry, then, holding all other things constant,
A)each "old" manufacturer must sell fewer computers than before.
B)some "old" manufacturers must exit the industry.
C)the equilibrium price of computers will rise.
D)the equilibrium quantity demanded of computers will rise.

Question

Quizplus · Accepted Answer

When new firms enter the computer manufacturing industry, it increases the supply of computers in the market. Holding all other factors constant, an increase in supply leads to a decrease in the price of computers and an increase in the quantity demanded, according to the law of supply and demand. This results in a new equilibrium where the quantity demanded is higher.

If New Firms Enter the Computer Manufacturing Industry, Then, Holding