If economic profits are being realized in a perfectly competitive industry, some firms will enter. This will shift the industry
A) demand curve rightward and result in a higher price
B) demand curve rightward and result in a lower price
C) supply curve rightward and result in a lower price
D) supply curve leftward and result in a higher price

Question

Quizplus · Accepted Answer

When new firms enter a perfectly competitive industry due to economic profits, the industry's supply curve shifts rightward. This increase in supply, assuming demand remains constant, leads to a lower equilibrium price.

If Economic Profits Are Being Realized in a Perfectly Competitive