Assume that there is only one firm producing electric toothbrushes and the firm's demand curve is the same as the market demand curve.If a second firm that also produces electric toothbrushes enters the market,the profit of the first firm decreases because

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When a second firm enters the market, competition increases, leading to a decrease in prices as each firm tries to attract customers. Additionally, the first firm may produce fewer electric toothbrushes due to the shared market demand, impacting its profit. Higher demand does not necessarily increase a firm's average cost of production; it's the competition and reduced market share that primarily affect the first firm's profit.

Assume That There Is Only One Firm Producing Electric Toothbrushes