Five firms are currently producing and selling in a market.When two more firms enter the market,economists expect that the equilibrium price will ________ and the equilibrium quantity will ________.

Question

Quizplus · Accepted Answer

When more firms enter a market, competition increases, leading to a decrease in prices as firms try to attract customers. The increased supply also leads to a higher equilibrium quantity.

Five Firms Are Currently Producing and Selling in a Market