When firms enter a market,the supply increases and:

Name: When firms enter a market,the supply increases and:
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Question

Quizplus · Accepted Answer

When firms enter a market, the supply of goods or services in that market increases. An increase in supply leads to a leftward shift in the demand curve, which results in a lower equilibrium price. The decrease in price reduces profits for firms operating in the market, as they receive less revenue for each unit sold. Therefore, the correct choice is A, price falls and profits decrease.

When Firms Enter a Market,the Supply Increases And