Answer the question on the basis of the following demand and cost data for a specific firm: $\begin{array}{c}
\underline{\text { Demand Data}}\quad\quad\quad\quad\quad\underline{\text { Cost Data}} \
\begin{array}{c}
\text { (1) }\
\underline{\text { Price } }\
\$ 11.00 \
9.99 \
9.00 \
8.00 \
7.10 \
6.00 \
5.15
\end{array}
\begin{array}{c}
\text { (2)}\
\underline{\text { Price}}\
\$ 10.00 \
8.85\
8.00\
7.00\
6.10\
5.00\
4.15
\end{array}
\begin{array}{c}
\text { (3)}\
\underline{\text { Quantity}}\
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{c}
\
\underline{\text { Output }} \
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{c}
\text { Total}\
\underline{\text { Cost}} \
\$ 61 \
62 \
64 \
67 \
72 \
79 \
86
\end{array}
\end{array}$
Refer to the data.Suppose that entry into the industry changes this firm's demand schedule from columns (1)and (3)shown to columns (2)and (3).Economic profit will:

Question

Answer the question on the basis of the following demand and cost data for a specific firm: $\begin{array}{c}
\underline{\text { Demand Data}}\quad\quad\quad\quad\quad\underline{\text { Cost Data}} \
\begin{array}{c}
\text { (1) }\
\underline{\text { Price } }\
 \$ 11.00 \
9.99 \
9.00 \
8.00 \
7.10 \
6.00 \
5.15
\end{array}
\begin{array}{c}
\text { (2)}\
\underline{\text { Price}}\
\$ 10.00 \
8.85\
8.00\
7.00\
6.10\
5.00\
4.15
\end{array}
\begin{array}{c}
\text { (3)}\
\underline{\text { Quantity}}\
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{c}
\
\underline{\text { Output }} \
6 \
7 \
8 \
9 \
10 \
11 \
12 
\end{array}
\begin{array}{c}
\text { Total}\
\underline{\text { Cost}} \
 \$ 61 \
62 \
64 \
67 \
72 \
79 \
86
\end{array}
\end{array}$
  Refer to the data.Suppose that entry into the industry changes this firm's demand schedule from columns (1)and (3)shown to columns (2)and (3).Economic profit will:

Quizplus · Accepted Answer

Entry into the industry typically increases competition and decreases a firm's market power. As a result, the firm's demand curve shifts leftward and becomes more elastic, leading to a lower equilibrium price and quantity. As a result, the economic profit for the firm declines and may ultimately approach zero. Therefore, option D is the correct answer, as it states that economic profit will decline to zero.

Answer the Question on the Basis of the Following Demand